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Based on Your Understanding of This Chapter, Discuss (1) How

question 33

Essay

Based on your understanding of this chapter, discuss (1) how group size affects the behaviour of group members, and (2) how diversity in group membership affects the behaviour of group members. Illustrate your responses with examples from everyday life.


Definitions:

Diversification

Diversification is an investment strategy that involves spreading investments across various financial instruments, industries, and other categories to reduce exposure to any single asset or risk.

Increase Risk

The action or process of raising the level of danger or the chance of loss in a financial investment or business venture.

Expected Rate

The predicted interest rate or return for an investment over a specific period.

Diversification Effects

The reduction in risk achieved by investing in a variety of assets, thus minimizing the impact of poor performance from any single asset.

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