Portfolio A has but one security,while Portfolio B has 100 securities.Because of diversification effects,we would expect Portfolio B to have the lower risk.However,it is possible for Portfolio A to be less risky.

Diversification Effects

The reduction in risk achieved by investing in a variety of assets, thus minimizing the impact of poor performance from any single asset.

Portfolio A

A specific collection of financial assets such as stocks, bonds, cash equivalents, and their mutual funds, owned by an individual or an institutional investor.

Portfolio B

Portfolio B is not a specific term but could refer to a theoretical or actual portfolio of investments selected as a part of an investment strategy or for analysis.