As the number of securities in a portfolio increases, the amount of systematic risk
A) remains constant.
B) decreases.
C) increases.
D) changes.
E) resets to zero.

Question

Quizplus · Accepted Answer

Systematic risk, also known as market risk, is inherent to the entire market or market segment. It is unaffected by diversification, so as the number of securities in a portfolio increases, the amount of systematic risk remains constant.

As the Number of Securities in a Portfolio Increases, the Amount