Investing in multiple investments of differing risk profiles for the purpose of reducing overall investment risk is called _____.

Question

Quizplus · Accepted Answer

Diversification involves investing in multiple investments of differing risk profiles to reduce overall investment risk. By spreading investments across various types of assets and sectors, the impact of any single investment's negative performance on the overall portfolio is minimized.

Investing in Multiple Investments of Differing Risk Profiles for the Purpose