Examlex
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Diversification
An investment strategy aimed at reducing risk by allocating investments among various financial instruments, industries, or other categories.
High Dividends
The distribution of a portion of a company's earnings, decided by the board of directors, to its shareholders, which is considered high relative to other companies or historical payouts.
Moral Hazard
The situation in which an entity has the incentive to take undue risks because the cost of those risks will be borne, at least in part, by others.
Firm-Specific Risk
The risk associated with an individual company, which can be reduced through diversification in investment.
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