Diversification refers to the _____.
A. ?reduction of the stand-alone risk of an individual investment, measured by its beta coefficient, by combining it with other investments in a portfolio
B. ?reduction of the stand-alone risk of an individual investment, measured by the standard deviation of its returns, by combining it with other investments in a portfolio
C. ?reduction of the systematic risk of an individual investment, measured by its beta coefficient, by combining it with other investments in a portfolio
D. ?reduction of the systematic risk of an individual investment, measured by the standard deviation of its returns, by combining it with other investments in a portfolio
E. ?reduction of the unsystematic risk of an individual investment, measured by its coefficient of variation, by combining it with other investments in a portfolio
Answer: B
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