Once you have _____ securities in a portfolio,there is very little benefit from further diversification.
A)3
B)6
C)30
D)50
E)75

Question

Quizplus · Accepted Answer

The concept of diminishing marginal returns applies to diversification. The more stocks you add to your portfolio, the less impact each additional stock has on reducing portfolio risk. Studies have shown that a portfolio of 30-40 stocks provides optimal diversification benefits, and after that point, the benefits become negligible. Therefore, it is reasonable to assume that there is very little benefit from further diversification once you have 30 securities in a portfolio.

Once You Have _____ Securities in a Portfolio,there Is Very