In Order to Reduce Risk, One Should Diversify into Areas

question 29

True/False

In order to reduce risk, one should diversify into areas that are positively correlated with current areas of involvement.
One can "diversify away" some element of risk by combining investments that operate in opposite directions from each other.

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Definitions:

Cross-sectional

A research design that looks at data from a population at a single point in time to identify patterns and associations.

Sequential

Pertaining to events, processes, or items that follow one after another in a specific order.

Longitudinal

A type of study or analysis that follows the same subjects over a period of time to observe changes or developments.

Cross-sectional

A type of observational study that analyzes data from a population, or a representative subset, at a specific point in time.