Diversification in Investment Is Achieved When

question 109

Multiple Choice

Diversification in investment is achieved when:

• A) the government invests in several projects of different lengths to increase total output.
• B) a business produces multiple unrelated products so that the firm can maximize profit.
• C) an economy trades with multiple trading partners for maximum benefit.
• D) an individual invests in several assets with independent or unrelated risks so that total risk from loss is reduced.

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Definitions:

Trade Promotion

Marketing activities executed to increase product demand among wholesaler, retailer, or distributor levels.

Fixed Cost

Costs that do not change with the level of production or sales activities, such as rent, salaries, and insurance.

Managerial Levers

Tools or mechanisms that managers can use to influence the performance and direction of their organization, such as decision-making processes, organizational structure, and resource allocation.

Large Lots

Bulk quantities of goods, often purchased or produced to achieve economies of scale but can lead to increased storage costs and risks.