The Purpose of Diversification Is to

question 45

Multiple Choice

The purpose of diversification is to

• A)increase the liquidity of a financial portfolio.
• B)reduce the brokerage fees involved in managing a financial portfolio.
• C)reduce risk.
• D)reduce tax liability.

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Definitions:

Open Water

Large bodies of water such as lakes, oceans, and rivers, where there are no obstructions to the passage of water.

Shore

The land along the edge of a sea, lake, or other large body of water.

Sunlight

The natural light emitted by the Sun, providing the primary energy source for Earth's climate and ecology.

Migratory Birds

Birds that travel from one region to another at regular times often over long distances, typically for breeding or weather conditions.