The Primary Purpose of Portfolio Diversification Is to

question 6

Multiple Choice

The primary purpose of portfolio diversification is to

• A)increase returns and risks.
• B)eliminate all risks.
• C)eliminate asset-specific risk.
• D)lower both returns and risks.
• E)eliminate systematic risk.

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Definitions:

Feelings

Emotional responses or states that arise in reaction to one's circumstances, perceptions, or interactions.

Anthropology

The study of human culture—the shared values, beliefs, and practices of a group of people

Human Culture

The shared practices, values, norms, ideas, and artifacts that characterize groups of people, transmitted over time.

Shared Values

Beliefs or standards held in common by a group or society, forming a basis for collective action and identity.