Which of the Following Is a Drawback of Diversification

question 78

Multiple Choice

Which of the following is a drawback of diversification?

• A) Spreading your investment over many securities may limit your chances for a large return.
• B) The value of a diversified fund could decrease and be worth less than the original investment
• C) Fees associated with diversification are not worth the possible benefits of diversification.
• D) Diversification offers no extra safety as all stock go up in the long term.
• E) None of the above.

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Definitions:

Chromosomes

Thread-like structures located inside the nucleus of animal and plant cells, made of protein and a single molecule of deoxyribonucleic acid (DNA).

Nucleus

In cells, a membrane-bound organelle that contains the cell's chromosomes and acts as the control center for gene expression and DNA replication.

DNA

Deoxyribonucleic acid, a molecule that carries the genetic instructions used in the growth, development, functioning, and reproduction of all living organisms and many viruses.

Eugenics

Eugenics is a controversial historical movement and set of beliefs aimed at improving the genetic quality of the human population through selective breeding and other methods.