Diversification Involves

question 10

Multiple Choice

Diversification involves:

• A) investing all your money in one company.
• B) investing all your money in the same type of financial assets, with the same amount of risk.
• C) investing all your money in a variety of financial assets, with varying amounts of risk.
• D) None of these statements is true.

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Definitions:

Inventory

The raw materials, work-in-progress products, and finished goods considered to be the portion of a business's assets that are ready or will be ready for sale.

Revenue

The sum of money received from selling goods or providing services that are fundamental to a company's main business activities.

Indirect Effects

Consequences of an action that are not immediately apparent or directly linked to the action but occur as a secondary effect.

Accounting Principle

Fundamental guidelines or rules that govern how financial transactions and events are recorded and reported in financial statements.