The Major Benefit of Diversification Is To

question 73

Multiple Choice

The major benefit of diversification is to:

• A) increase the expected return.
• B) remove negative risk assets from the portfolio.
• C) reduce the portfolio's systematic risk.
• D) reduce the expected risk.

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Definitions:

Maturity Value

The total amount that will be paid to an investor at the end of a fixed income security's term, including principal and interest.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) for the preparation of public company financial statements globally.

Losses Disclosure

The requirement for companies to provide detailed reports of financial losses within their financial statements, enhancing transparency.

Reasonably Possible

Refers to a situation or outcome that is within the realm of likelihood, though not certain, based on current knowledge and circumstances.