Risk
A)can be reduced by placing a large number of small bets rather than a small number of large bets.
B)can be reduced by increasing the number of stocks in a portfolio.
C)Both A and B are correct.
D)Neither A nor B are correct.

Question

Quizplus · Accepted Answer

A diversified portfolio with a large number of stocks can reduce the risk of individual stock failures, while placing a large number of small bets can reduce the impact of one large loss on the overall portfolio. Thus, both options A and B can help reduce risk.