Javier wants to invest, but wants to reduce his risk of loss by spreading the total investment across more stocks. Javier would be most interested in which of the following?
A) Spreading
B) Shorting
C) Margin buying
D) Diversification
E) Asset allocation

Question

Quizplus · Accepted Answer

Diversification is the practice of investing in a variety of stocks across different industries and sectors in order to reduce the overall risk of loss. By spreading his investment across more stocks, Javier is less vulnerable to the performance of any one particular stock or industry.

Javier Wants to Invest, but Wants to Reduce His Risk