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There Are Three Types of Diversification; Related, Unrelated, and Concentric

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There are three types of diversification; related, unrelated, and concentric.


Definitions:

Real Exchange Rate

The rate at which two currencies can be exchanged, adjusted for inflation, indicating how much of a country's goods and services can be exchanged for those of another country.

Prices Rise

An increase in the cost of goods and services in an economy over a period of time.

Purchasing-Power Parity

A theory that states prices of goods and services should equalize across countries when expressed in a common currency, accounting for exchange rates.

Money Supply

The grand total of money available in an economy at a specific time, encompassing cash, coins, and deposits in checking and savings accounts.

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