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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.


Definitions:

Nearsightedness

A common vision condition where objects nearby are seen clearly, but distant objects appear blurred, also known as myopia.

Glaucoma

Irreversible damage to the optic nerve caused by increased pressure in the eye.

Myopia

Nearsightedness.

Physical Losses

The reduction or disappearance of physical assets, health, or capabilities.

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