In an article,"Preparing for the Next Black Swan" (Wall Street Journal,Aug 21,2010),the point is made that diversification may be insufficient in protecting one's portfolio during a "Black Swan" event.Why may this be TRUE?
A) Virtually all asset classes may decline at the same time.
B) Investors may be unable to buy different assets during a "Black Swan" event.
C) Some assets may rise while others decline during a "Black Swan" event.
D) Black Swan events are surprises and thus one cannot prepare for such an event.

Question

Quizplus · Accepted Answer

A "Black Swan" event is an extremely rare and unpredictable event that can have a significant impact on financial markets. During such an event, virtually all asset classes may decline at the same time, regardless of how diversified a portfolio is. Therefore, diversification may not be sufficient in protecting one's portfolio during a "Black Swan" event.

In an Article,"Preparing for the Next Black Swan" (Wall Street