Answer-first summary for fast verification
Answer: Systematic risk can be eliminated by holding securities in a well-diversified international stock portfolio.
## Explanation Let's analyze each statement: **A. Not all risk is diversifiable.** - **TRUE** - This is correct because systematic risk (market risk) cannot be diversified away. **B. Unsystematic risk can be substantially reduced by diversification.** - **TRUE** - This is correct because unsystematic risk (firm-specific risk) can be reduced through diversification. **C. Systematic risk can be eliminated by holding securities in a well-diversified international stock portfolio.** - **FALSE** - This is incorrect because systematic risk affects all securities in the market and cannot be eliminated through diversification, even with international diversification. **D. None of above.** - This would be incorrect since statement C is false. Therefore, the **least accurate** statement is **C**.
Author: LeetQuiz Editorial Team
Ultimate access to all questions.
Which of the following statements about portfolio risk and diversification is least accurate?
A
Not all risk is diversifiable.
B
Unsystematic risk can be substantially reduced by diversification.
C
Systematic risk can be eliminated by holding securities in a well-diversified international stock portfolio.
D
None of above.
No comments yet.