Hire an expert

Got a question? Ask 300+ experts!

Biology Algebra Calculus English Grammar Literature Math Physics Psychology More Subjects →

Chemistry Economics Geography History Law Philosophy Politology Programming Uncategorized

QA › Economics › Buying several different investment alternatives to spread the risk helps an investor achieve:

Buying several different investment alternatives to spread the risk helps an investor achieve:

A.lower rates of return.

B.lower commission fees.

C.isolation.

D.diversification.

Answer: D. Diversification.

In risk management in investments, the process of buying several different investment alternatives and portfolios to help spread the risk is known as diversification.

In other words, diversification is a strategy that investors use to minimize risk by including a good number of different types of investments. This strategy is applied when investors want to minimize their exposure to any risk associated with one huge investment deal.

A simpler way of explaining this would be that investors hate to put all their eggs in the same basket, for fear that they can be easily compromised by one problem or risk factor. In addition, the diversification of investments and assets has been known as a means of providing higher and longer-lasting yields.

Economics

2 years ago

31 Views

Math Calculus — AID—

Total time spent: 4 hours 15 minutes (it is equivalent to 255 minutes). Let the flight time from Paris to Glasgow be X. Then the flight time from Glasgow to Paris will be (X+10). We have an equation with one unknown variable: X + 45 + (X+10) = 255 ⇒ X = 100 So the […]

What were the typical crafts for Maya?

Mayans are well-known as great pottery makers. They did not use the pottery wheel. However,the tecnique they used was coiling consecutive rings of clay on top of each other and smoothing the surface by hand. Also, they were good when it came to working with stone – stone craving is another important craft of Maya. Many […]

What defines a free market?

The efficient working of a free market economy requires that the producer firms must have incentives to work hard and produce goods and services at the lowest possible cost per unit of output Market economies provide incentives to the firms and individuals by recognising and enforcing the property rights of the individuals and firms to […]

How does 3D printing work?

There are three different ways 3D printers work but they all rely on the printer converting a design into individual 2D slices which are then combined to make the final 3D object. The first method uses a pool of chemicals that turns solid when light, typically a UV laser, is shone on to it. The […]

Cigarette smoking causes emphysema.

Nearly everyone knows that smoking causes lung cancer, but did you know that smoking causes a number of other serious lung diseases? These include chronic bronchitis and emphysema, collectively known as chronic obstructive pulmonary disease (COPD). COPD is the fourth largest killer of Australians and smoking is the most important risk factor for COPD. When […]