3 years ago

Why is diversification of investments important?

Business

1 answer:

faltersainse [42]3 years ago

3 0

Answer:

O It spreads the investor's risk over several types of investments

Explanation:

Diversification is the practice of spreading investments in different asset classes. It involves purchasing a variety of investment assets rather than a single asset. Diversification spreads the risk associated with investments to the different categories of assets.

The main objective of diversifying is to minimize the risk. Should a particular investment to move against expectations, the other assets help reduce the losses. The assets in a diversified investment are referred to as a portfolio.

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