Which of the following statements is false?
A) Diversification can reduce risk.
B) Diversification can reduce risk but only by reducing the expected return.
C) Diversification reduces idiosyncratic risk.
D) Diversification allocates savings across more than one asset.

Question

Quizplus · Accepted Answer

Diversification can reduce risk without necessarily reducing the expected return. By allocating savings across multiple assets with different levels of risk and return, an investor can achieve a similar expected return while reducing overall risk through diversification.

Which of the Following Statements Is False