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If you randomly select stocks and add them to your portfolio, which of the following statements best describes what you should expect?

Adding more such stocks will increase the portfolio's expected rate of return.

Adding more such stocks will reduce the portfolio's beta coefficient and thus its systematic risk.

Adding more such stocks will have no effect on the portfolio's risk.

Adding more such stocks will reduce the portfolio's market risk but not its unsystematic risk.

Adding more such stocks will reduce the portfolio's unsystematic, or diversifiable, risk.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91419529

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