Spreading the risk of investing over several different types of investments is known as what?

Question

Quizplus · Accepted Answer

Diversification is the practice of spreading investments over different asset categories or sectors to reduce the risk of loss in any one particular area. It allows an investor to potentially benefit from the growth of several different areas of the market while minimizing the impact of any single poor performing asset. The other options, such as growth investing or value investing, refer to specific investment strategies rather than risk management techniques.

Spreading the Risk of Investing Over Several Different Types of Investments