Tyler is concerned about his portfiolio so he asks his best friend Tippie for so

Question

Tyler is concerned about his portfiolio so he asks his best friend Tippie for some advice. Since Tippie is a certified financial advisor, he is most likely to counsel Tyler that:

A.Concentrating an investment in three companies all within the same industry will greatly reduce the systematic risk.

B. Spreading an investment across five diverse companies will not lower the total risk.

C. Spreading an investment across many diverse assets will eliminate some of the total risk.

D. Concentrating an investment in two or three large stocks will eliminate all of the unsystematic risk.

E. Spreading an investment across many diverse assets will eliminate all of the systematic risk.

Explanation / Answer

Option C is correct Spreading an investment across many diverse assets will eliminate some of the total risk

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