The underlying principles of portfolio theory include:

A) diversifying business-specific risk away.
B) basing decisions on stocks' risk/return characteristics in a portfolio context rather than on a stand-alone basis.
C) getting the highest available return for the amount of risk the investor is comfortable with.
D) All of the above

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Aryan Gulsia · Accepted Answer

Final Answer : D, Explanation :  All the given options are underlying principles of portfolio theory. Diversifying helps in reducing risk, considering risk/return characteristics on a portfolio level helps in maximizing returns, and choosing a risk level that the investor is comfortable with is essential for successful portfolio management.

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