Which of the following is correct concerning diversification?
a. It only reduces firm-specific risk, but most of the reduction comes from increasing the number of stocks in a portfolio to well above 30.
b. It only reduces firm-specific risk; much of the reduction comes from increasing the number of stocks in a portfolio from 1 to 30.
c. It only reduces market risk, but most of the reduction comes from increasing the number of stocks in a portfolio to well above 30.
d. None of the above is correct.