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Which of the following statements about diversification are true? Select one or more correct answers....

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Accounting

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Which of the following statements about diversification are true? Select one or more correct answers. O None of these choices is correct. O A highly diversified portfolio, such as the S&P500, eliminates most of the systematic risk. O There is a limit to the benefits of diversification because of asset-specific risk. O As you increase the number of assets you hold, the marginal benefits of diversification are positive but diminish. O To benefit from diversification you have to put assets together that don't move alike, Diversification is difficult and costly. Going from one randomly chosen asset to four eliminates a lot of nsystematic risk because it is relatively easy to find assets that don't ove alike. Treasury bills eam 3% while the CAPM predicts that WSB Inc. stock will have an expected return of 12%. Which of the following statements are false? Select "All are true" if you think none of the statements are false. Select the single best answer. O WSB Inc.has systematic risk. O WSB stock will earn 12% next year. O The 12% indudes a risk premium. O The return compensates shareholders for the systematic risk they bear. O All are true. O The expected return compensates the shareholders for inflation

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