The Major Benefit of Diversification Is To

question 73

Multiple Choice

The major benefit of diversification is to:

• A) increase the expected return.
• B) remove negative risk assets from the portfolio.
• C) reduce the portfolio's systematic risk.
• D) reduce the expected risk.

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Definitions:

False Cause

A logical fallacy where it is erroneously assumed that one thing is the cause of another because of a sequence of events.

Bloom's Taxonomy

A classification system used to define and distinguish different levels of human cognition – understanding, learning, and thinking.

Analyze

The process of examining something methodically to understand its components, meaning, or relationships.

Bloom's Taxonomy

A classification system used in education to define and distinguish different levels of human cognition - i.e., thinking, learning, and understanding.