A well-diversified portfolio has negligible
A)unsystematic risk.
B)systematic risk.
C)expected return.
D)variance.
E)Both C and D.

Question

Quizplus · Accepted Answer

A well-diversified portfolio minimizes unsystematic risk, which is the risk specific to individual assets and can be mitigated through diversification. Systematic risk, on the other hand, is the risk inherent in the overall market or economy and cannot be eliminated through diversification. Expected return and variance are important considerations when constructing a portfolio, but neither is negligible in a well-diversified portfolio.

A Well-Diversified Portfolio Has Negligible