Question

Which of the following statements about diversification is correct

Answer 1

Diversification means wide variety of different investment options available in the portfolio so that it becomes lesser risky towards minimizing losses in down market.

It provides better protection towards common issues like inflation, market instability, war effects, hike in exchange rates, interest rates reduction etc. So, we can conclude that :-

Diversification is the method to make investments less vulnerable to a catastrophic loss.

Hence, option A is best answer from given choices.