The allocation of surplus funds to a variety of financial instruments instead of holding just one asset is called

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Diversification is the act of spreading investments among various assets to reduce the risk of loss, which promotes stability and helps to achieve long-term financial goals. By doing so, the possibility of gains and losses from investment allocation is reduced, and the investment portfolio is diversified. As a result, diversification helps to manage investment risk and reduce the impact of volatility, thereby protecting the investor's overall portfolio.

The Allocation of Surplus Funds to a Variety of Financial