Explain the Primary Goal of Portfolio Diversification as It Relates

question 37

Essay

Explain the primary goal of portfolio diversification as it relates to asset allocation and correlation.

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Definitions:

Expenses

Outflows of resources or incurrences of liabilities that result in a decrease in the equity of a company, other than distributions to owners.

Accounts Receivable

Money owed to a company by its customers for goods or services provided on credit.

Trial Balance

A bookkeeping report that lists the balances of all ledgers accounts to check the arithmetic accuracy of the accounts.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity, typically including the balance sheet, income statement, and cash flow statement.