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ss7ja [257]
3 years ago
5

The principle of diversification tells us that:

Business
1 answer:
lisov135 [29]3 years ago
4 0

Answer:

E. spreading an investment across many diverse assets will eliminate some of the total risk

Explanation:

Total risk is composed of systematic and unsystematic risk. Diversification eliminates nearly all unsystematic risk; which is also known as diversifiable risk or firm-specific risk. This is done by holding assets which are negatively correlated; like from uncorrelated industries. Systematic risk on the other hand affects the entire securities market and investors are compensated for it through a risk premium.

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They relate through that they both allow for renting?

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The statement is True.

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Option "B" is the correct answer to the following statement.

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