The Purpose of Diversification Is To

question 11

Multiple Choice

The purpose of diversification is to:

• A) increase a portfolio's expected return.
• B) reduce a portfolio's non-diversifiable risk.
• C) reduce a portfolio's systematic risk.
• D) reduce a portfolio's total risk.

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Definitions:

Informal

A casual or relaxed style of communication that is not bound by strict rules or formalities.

Synthetic Intelligence

Artificial intelligence that is designed to mimic or surpass human cognitive functions.

Analyze Ideas

The systematic examination of concepts or proposals to understand their components, relationships, and implications.

Persistent

The quality of continuing steadfastly or firmly in a course of action in spite of difficulty or opposition.