Diversification Reduces the Risk of a Portfolio Because Share Prices

question 66

True/False

Diversification reduces the risk of a portfolio because share prices do not move identically and some of the risks are averaged out of the portfolio.

---

Definitions:

Interrelated Flows

Processes or movements that are interconnected, influencing and interacting with each other in a system or network.

Hybridization

The process or act of combining or blending two different elements, such as cultures, technologies, or species, to produce something new or more effective.

Glocalization

A strategy that combines global approaches to local markets by adapting products or services to fit local cultures and preferences.

Multi-Cultural

Having, relating to, or representing several different cultures or cultural elements.