We may not be able to fully remove risk by diversification if:
A. a completely risk-free asset does not exist.
B. the asset returns in our portfolio are positively correlated.
C. buying stock on margin is not allowed by financial regulators.
D. none of the above
Answer:B
We may not be able to fully remove risk by diversification if:
A. a completely risk-free asset does not exist. B. the asset returns in our portfolio are positively correlated. C. buying stock on margin is not allowed by financial regulators. D. none of the above