Diversification:
A) reduces the likelihood that bad things will happen.
B) means you're not likely going to be completely ruined by a single unfortunate event.
C) increases the likelihood that bad things will happen.
D) None of these statements is true.

Question

Quizplus · Accepted Answer

Diversification involves spreading your investments across multiple assets or asset classes to reduce the risk of loss from a single investment or event. By doing so, you are less likely to be completely ruined by a single unfortunate event that may only affect one asset or asset class.