A Major Argument Against Diversification Is That It's More Efficient

question 29

True/False

A major argument against diversification is that it's more efficient for shareholders to hold diversified share portfolios, than to invest in diversified companies.

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Definitions:

Accounts Receivables

Liabilities of customers towards a business for commodities or assistance that have been executed or utilized, waiting to be paid.

Collecting Accounts

The process of managing the collection of revenues or receivables from clients or customers.

Operating Cycle

The duration it takes for a company to purchase inventory, sell it, and then convert the sales back into cash. It reflects the efficiency with which a company can turn its product into cash.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, indicating efficiency in managing stock.