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The correct answer is A. Statement of financial position, which is also commonly referred to as the balance sheet. The Investment Funds in Canada curriculum explains that this statement provides a snapshot of a company’s assets, liabilities, and shareholders’ equity at a specific point in time.

Unlike the income statement or statement of comprehensive income, which measure performance over a period, the statement of financial position reflects what the company owns and owes on a particular date. The cash flow statement tracks the movement of cash over time, not a single moment. A bank statement is not a formal financial statement used in corporate analysis.

The CIFC text emphasizes that understanding the statement of financial position is essential for assessing financial strength, solvency, and capital structure. Therefore, Option A is the correct and fully CIFC-aligned answer.

Variance measures the dispersion of returns around the mean; lower variance indicates greater stability and less volatility. Adding a security with low variance and low correlation to the portfolio reduces overall risk .

High standard deviation = higher risk.

High beta = greater sensitivity to market moves .

Low alpha = underperformance, not risk reduction.

Thus, the feature that reduces portfolio risk is Low variance.