Diversiﬁcation is an investment strategy that seeks to reduce the overall risk in an investment
portfolio by selecting a group of assets whose risks differ from one another.

Question

Quizplus · Accepted Answer

This statement is true. Diversification is a widely used strategy in investing to spread out or balance risks by selecting various investments that perform differently from each other. This way, the potential losses from one investment could be balanced or compensated by the gains from others, thereby reducing the overall risk of the portfolio.

Diversiﬁcation Is an Investment Strategy That Seeks to Reduce the Overall