**As Diversification Increases The Firm-Specific Risk Of A Portfolio Approaches**. As diversification increases, the unique risk of a portfolio approaches _____. As diversification increases, the unique risk of a portfolio approaches.

As the number of stocks in the portfolio increases the exposure to risk decreases. The index model was first suggested by. As diversification increases, the total variance of a portfolio approaches.

### Diversification Is Primarily Used To Smooth Out Or Eliminate Unsystematic Risk.

As diversification increases, the unsystematic risk of a portfolio approaches. As measured by the variance (or standard deviation) of the market portfolio. 10+ million students use quizplus to study and prepare for their homework, quizzes and exams through 20m+ questions in 300k quizzes.

### The Standard Deviation Of The Market Portfolio E.

Unsystematic risk decreases and most of the remaining risk is systematic; Unsystematic risk decreases and most of the remaining risk is systematic; It can help mitigate risk and volatility by spreading potential price swings in either direction across different assets.

### As Diversification Increases, The Unsystematic Risk Of A Portfolio Approaches.

As measured by the variance (or standard deviation) of the market portfolio. Unsystematic risk decreases and most of the remaining risk is systematic, as measured by the variance (or standard deviation) of the market portfolio. As more and more securities are added to the portfolio, unsystematic risk decreases and most of the remaining risk is systematic, as measured by the variance (or standard deviation) of the market portfolio.

### The Variance Of The Market Portfolio D.

C)the variance of the market portfolio. However, portfolio diversification cannot eliminate all risk from the portfolio. Correlation is a key variable in portfolio diversification.

### Due To The Influence Of A Single Common Factor Represented By.

As more and more securities are added to the portfolio, unsystematic risk decreases and most of the remaining risk is systematic, as measured by the variance (or standard deviation) of the market portfolio. • the risk (variance) on any individual investment can be broken down into two sources: Portfolio diversification is the risk management strategy of combining different securities to reduce the overall investment portfolio risk.