In most cases, combining investments in a portfolio leads to [blank].
A)high risk
B)a large standard deviation
C)risk reduction
D)a low correlation coefficient

Question

Quizplus · Accepted Answer

Combining investments in a portfolio can lead to risk reduction through diversification. By investing in multiple assets with different risk and return profiles, the overall portfolio is less risky than any individual asset. This is because the returns of different assets do not move in perfect correlation with each other, meaning that when some may be doing poorly, others may be doing well, creating a balance in the portfolio.

In Most Cases, Combining Investments in a Portfolio Leads to [Blank]