Which of the following is not correct?

a. There is a greater reduction in risk by increasing the number of stocks in a portfolio from 1 to 10, than by increasing it from 100 to 120 stocks.
b. The historical rate of return on stocks has been about 5 percentage points higher than the historical rate of return on bonds.
c. Stock in an industry that is very sensitive to economic conditions is likely to have a higher average return than stock in an industry that is not so sensitive to economic conditions.
d. If you had information about a corporation that no one else had, you could earn a very high rate of return. This contradicts the efficient market hypothesis.


d

Economics

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