A strategy that attempts to reduce the overall risk of an entire investment portfolio by investing in a variety of assets is called
A) pooling.
B) arbitrage.
C) diversiﬁcation.
D) weighted average.

Question

Quizplus · Accepted Answer

Diversification involves investing in a variety of assets to reduce the overall risk of a portfolio. This involves spreading investments across different types of securities, industries, and geographic regions. This helps to minimize the impact of any single investment's poor performance. Pooling involves combining resources with other investors, arbitrage involves taking advantage of price differences in different markets, and weighted average is a statistical calculation used to determine the average value of a set of numbers, often used in portfolio management but not a strategy in itself.

A Strategy That Attempts to Reduce the Overall Risk of an Entire