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An Individual Can Reduce Financial Risk by Diversifying Investments, That

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An individual can reduce financial risk by diversifying investments, that is, by investing in several assets whose possible losses are independent events.


Definitions:

Offer

An offer from one entity to another aimed at establishing a legal contract if accepted.

Contract

An agreement creating obligations enforceable by law, formed by the mutual consent of parties with capacity to agree.

Market Value

The current price at which an asset or service can be bought or sold in an open and competitive market environment.

Consideration

A fundamental component in contract law that involves something of value exchanged between parties, which is necessary for a contract to be legally binding.

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