C. To protect the investor from the risk of a single company that performs poorly or goes bankrupt
Diversification helps spread the investment across different assets, industries, or regions, reducing the overall risk in a portfolio. This way, if one investment underperforms or fails, the impact on the overall portfolio is minimized.
What is the benefit of “diversification”?
A. To protect the investor from the risk of a single bad day in the market
B. By giving the investor advice on which stocks to purchase
C. To protect the investor from the risk of a single company that performs poorly or goes bankrupt
1 answer
1 answer