The Most Often-Cited Benefits of Diversification Are

question 3

Multiple Choice

The most often-cited benefits of diversification are

• A)growth, risk reduction and value creation.
• B)risk reduction and economies of scope.
• C)value creation and cost reduction.
• D)cash balancing and risk reduction.

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Definitions:

Mutual Fund Assets

The total market value of all the financial assets being managed by a mutual fund.

Guaranteed Rates

Guaranteed rates are interest or return rates promised to investors or savers over a specified period, regardless of market conditions.

Low-cost Diversification

A financial strategy that involves spreading investments across various assets to reduce risk without incurring significant expenses.

Professional Management

The oversight of investment portfolios by specialists who make decisions about asset selection and allocation, aiming to achieve specific financial goals.