The Primary Purpose of Portfolio Diversification Is To

question 91

Multiple Choice

The primary purpose of portfolio diversification is to:

• A) increase returns and risks.
• B) eliminate all risks.
• C) eliminate asset-specific risk.
• D) eliminate systematic risk.
• E) lower both returns and risks.

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Definitions:

Applied Social

Refers to the use of social science theories, concepts, and methods to address real-world issues and problems.

Hypothesis

a proposed explanation made on the basis of limited evidence as a starting point for further investigation.

Diet

The kinds of food that a person, animal, or community habitually eats.

Stress

A physical or mental response to an external cause, resulting in strain or tension.