To achieve effective diversification, a fund must have 80 to 100 different securities.

Question

Quizplus · Accepted Answer

The number of securities required for effective diversification may vary depending on the type of securities and the risk level of the portfolio. While 80 to 100 securities may provide a good level of diversification for some funds, others may achieve sufficient diversification with a smaller or larger number of securities. Factors such as correlation between securities and the fund's investment objectives should also be considered when determining the appropriate number of securities for diversification.

To Achieve Effective Diversification, a Fund Must Have 80 to 100