The Primary Benefit of Diversification Is That It

question 76

Multiple Choice

The primary benefit of diversification is that it

• A) is convenient.
• B) is cheap.
• C) reduces the exposure of your investments to adverse effects of any individual investment.
• D) increases stock volatility.

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Definitions:

Accounts Receivable Period

The mean duration a company requires to receive payments from its clients following a sale.

Quarterly Sales

Revenue generated by a company, or the amount of goods/services sold within a specific three-month period.

Accounts Payable Period

The average number of days it takes for a company to pay its invoices from suppliers and creditors.

Cash Disbursements

The total amount of money that a company pays out in cash during a specific period.