Question

which of the below is the best description of the effect of portfolio diversification? select one: a. both risk and expected return are rising at the same time. b. risk is reduced without necessarily reducing the expected return. c. risk is increased while holding the expected return roughly constant. d. risk is reduced at the same time as expected return is reduced.

Answer 1

Answer: The answer is C

Explanation: Risk is increased while holding the expected return roughly constant

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