According to Modern Portfolio Theory, portfolio risk is determined by both the individual variances of the assets and the covariances (or correlations) between them.

I. A large number of assets: Correct. As the number of assets in a portfolio increases, the idiosyncratic (firm-specific) risk of the portfolio diminishes, leaving primarily systematic risk. Thus, increasing the number of assets generally reduces total portfolio risk.

II. Low correlations among assets: Correct. Lower (or negative) correlation means that the assets do not move in perfect tandem. This reduces the covariance component of the portfolio variance formula, leading to greater diversification benefits and lower overall portfolio risk.

Since both increasing the number of assets and having low correlations among them reduce overall portfolio risk, both statements I and II are correct.