Asked by Angie Castro on Jun 08, 2024
Verified
Diversification can reduce the riskiness of a portfolio of stocks.
Diversification
Diversification is an investment strategy that involves spreading investments across various financial instruments, industries, and other categories to reduce exposure to any single asset or risk.
- Recognize the critical role diversification plays in reducing the vulnerability of a portfolio to risk.
Verified Answer
SV
Stacey VernerJun 09, 2024
Final Answer :
True
Explanation :
Diversification spreads the portfolio across multiple stocks and reduces the exposure to any single company or industry, thus reducing the overall riskiness of the portfolio.
Learning Objectives
- Recognize the critical role diversification plays in reducing the vulnerability of a portfolio to risk.
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