Q798
Risk in average individual stock can be reduced by placing an individual stock in
A.
low risk portfolio
B.
diversified portfolio
AnswerC.
undiversified portfolio
D.
high risk portfolio
Answer: Option B
Solution
Answer: Option B
Solution:
Risk in average individual stock can be reduced by placing an individual stock in diversified portfolio. A diversified investment is a portfolio of various assets that earns the highest return for the least risk. A typical diversified portfolio has a mixture of stocks, fixed income, and commodities.