Which of the Following Statements Is Correct with Regards to Diversification

question 75

Multiple Choice

Which of the following statements is correct with regards to diversification?

• A) Diversifying reduces the return of the portfolio.
• B) Diversifying reduces the market risk of the portfolio.
• C) Diversifying reduces the dollar return of the portfolio.
• D) None of these choices are correct.

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Definitions:

Retailers

Businesses or individuals that sell goods directly to consumers, acting as the final step in the distribution chain from manufacturers to consumers.

Loyalty Segmentation

The process of dividing a customer base into groups based on their loyalty to a brand or company, which can inform targeted marketing strategies.

Geodemographic

The study of populations and their characteristics, such as age, gender, and income, in specific geographic areas for market segmentation purposes.

Psychographic

Pertaining to the study of consumer lifestyles, attitudes, beliefs, and values to understand buying behaviors and preferences.