Explain How a Diversified Portfolio Can Reduce Fluctuations in Returns

question 107

Essay

Explain how a diversified portfolio can reduce fluctuations in returns even when the economy as a whole is experiencing contractions and expansions.

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Definitions:

Ego Integrity

A sense of wholeness and satisfaction with life's achievements, part of psychological maturity, especially in later life.

Cognitive Processes

involve the mental activities related to thinking, knowing, remembering, and communicating.

Fight-Or-Flight Response

A bodily response triggered by a real or imagined danger, assault, or threat to one's survival.

Dry Mouth

Dry mouth, or xerostomia, refers to a condition characterized by a decrease in saliva production, leading to a feeling of dryness in the mouth.