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

Question

Quizplus · Accepted Answer

A well-diversified portfolio consists of a variety of investments, which reduces the unsystematic risk. The systematic risk cannot be eliminated by diversification, but it can be diminished to some extent. However, a diversified portfolio is expected to have a positive return and variance (the measure of risk). Therefore, options A, B, D, and E are incorrect.

A Well-Diversified Portfolio Has Negligible