While diversification decreases risk, it also increases the chance of a large gain.

Name: While diversification decreases risk, it also increases the chance of a large gain.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Diversification reduces risk by spreading investments across various financial instruments, industries, or other categories, but it also dilutes the impact of high performers on the overall portfolio, potentially reducing the chance of a large gain from a single investment.

While Diversification Decreases Risk, It Also Increases the Chance of a Large