Moderate levels of diversification yield lower levels of performance than either limited or extensive diversification.

Question

Quizplus · Accepted Answer

Moderate levels of diversification can actually yield higher levels of performance because they balance the benefits of risk reduction and the costs of complexity. Limited diversification may not sufficiently reduce risk, and extensive diversification may lead to diminishing returns due to increased complexity and management challenges.

Moderate Levels of Diversification Yield Lower Levels of Performance Than