Which combination of assets represents the most diversification?
A) holding corporate and Treasury bonds
B) holding shares of Google and Yahoo
C) holding shares of Google and Microsoft
D) holding shares of Google along with Treasury bonds

Question

Quizplus · Accepted Answer

Diversification is achieved by investing in assets that do not closely correlate with each other. Holding shares of Google along with Treasury bonds combines equity and debt securities from different sectors, providing more diversification than options A, B, or C, which involve assets within the same asset class or closely related industries.

Which Combination of Assets Represents the Most Diversification