The Main Benefit of Diversification Is That It Reduces the Exposure

question 73

True/False

The main benefit of diversification is that it reduces the exposure of your investments to the adverse effects of any individual stock.

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Definitions:

Relies

The act of depending on or trusting in something or someone for support or help.

Bonus Pay

A pay plan that rewards employees for recent performance rather than historical performance.

Extrinsic Reward

A reward or incentive provided by an external source, such as money, grades, or recognition, to motivate behavior or performance.

Profit Sharing

A company policy of distributing a portion of its net profits to its employees, typically as a motivational tool and a means of fostering a sense of ownership and loyalty.