Examveda

Risk in average individual stock can be reduced by placing an individual stock in

A. low risk portfolio

B. diversified portfolio

C. undiversified portfolio

D. high risk portfolio

Answer: Option B

Solution (By Examveda Team)

Risk in average individual stock can be reduced by placing an individual stock in diversified portfolio. A diversified investment is a portfolio of various assets that earns the highest return for the least risk. A typical diversified portfolio has a mixture of stocks, fixed income, and commodities.

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