Diversification in one's investments reduces
A)idiosyncratic risk.
B)pooling risk.
C)systemic risk.
D)time preference risk.

Question

Quizplus · Accepted Answer

Diversification helps to spread investments across different assets or securities, which helps to reduce the risk associated with any individual investment or company. This means that idiosyncratic risk, which is the risk associated with a particular company or asset, is reduced through diversification. However, diversification does not eliminate systemic risk, which is the risk associated with the overall market or economy.

Diversification in One's Investments Reduces