As you add more stocks to a portfolio, the systematic risk of the portfolio ________. A. falls B. may rise or fall C. remains unaffected D. rises
C. remains unaffected systematic risk is undiversifiable
Think of it like you can’t bust the system.
Definately C - systematic = undiversifiable risk…
you can probably reduce systematic risk by diversifying into foreign markets
are u guys sure ?
May rise or fall !!! If the variance of the portfolio with the market as measured by the beta of the portfolio may increase or decreasing depending on the ind. stock that you are adding !!! So B)
YEAAAAAAAAAAAAAAAAAAAHHHH congrat KrisC Edit amber: I went to the wall with great confidence too
Do you have a different answer?
Ooooh, that is an evil question.