Why Does Diversification Reduce Risk

question 34

Essay

Why does diversification reduce risk?

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Definitions:

Financial Statements

Documents that provide an overview of a company's financial condition, including the balance sheet, income statement, and statement of cash flows.

Securities and Exchange Commission

The Securities and Exchange Commission (SEC) is a U.S. federal agency responsible for regulating the securities industry and protecting investors by enforcing laws against market manipulation.

Chief Financial Officer

The senior executive responsible for managing the financial actions of a company, including financial planning, risk management, and financial reporting.

Certify

To officially recognize, verify, or endorse something as true, valid, or in compliance with a standard.