The purpose of diversification is:
A) To capture more consumers
B) To satisfy the mission and vision
C) To build a portfolio of businesses much like a portfolio of stock
D) To spread out risk and opportunities over a larger set of businesses

Question

Quizplus · Accepted Answer

The purpose of diversification is to spread out risk and opportunities over a larger set of businesses. By having a portfolio of businesses, a company is less vulnerable to the ups and downs of a particular industry, market or product. This allows for protection against financial loss and potentially greater returns.

The Purpose of Diversification Is