________ reduces risk by allocating investments proportionally to the investment pyramid.

Question

Quizplus · Accepted Answer

Diversification is the practice of allocating investments across multiple asset classes, sectors, and geographic regions. This helps to reduce risk by spreading investments across many different areas, rather than concentrating them in a single area. The investment pyramid strategy is a common approach to diversification, where investments are allocated proportionally across different levels of risk and return. This approach helps to balance risk and return and minimize the impact of any one investment or asset class on the overall portfolio performance.

________ Reduces Risk by Allocating Investments Proportionally to the Investment