The principal of diversification involves investing in a variety of assets with which one of the following being the primary goal?
A)increasing returns
B)minimizing taxes
C)reducing some of the risk
D)eliminating all of the risk
E)increasing the variance

Question

Quizplus · Accepted Answer

The primary goal of diversification is to reduce some of the risk involved in investing by spreading investments across different asset classes. It is not necessarily aimed at increasing returns, minimizing taxes, eliminating all risk, or increasing variance.

The Principal of Diversification Involves Investing in a Variety of Assets