Utilising the fact that two or more asset values do not always move in the same direction at the same time in order to reduce the risk of a portfolio is called diversification.

Question

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Diversification is the process of spreading investments across different types of assets to reduce the risk of the portfolio. By investing in assets that move in different directions, the portfolio's overall risk is reduced because losses in one asset may be offset by gains in another.

Utilising the Fact That Two or More Asset Values Do