An investor will diversify his portfolio to reduce risk.

Question

Quizplus · Accepted Answer

Diversification is a strategy used to reduce the overall risk in a portfolio by investing in multiple assets, as opposed to just one or a few. By spreading investments across different asset classes, industries, and geographic regions, an investor can reduce the impact that any one investment or market event can have on the portfolio as a whole. This can help to smooth out returns and improve the likelihood of meeting long-term financial goals.

An Investor Will Diversify His Portfolio to Reduce Risk