Question

question 9 of 10
what is diversification?
a. eliminating the risk of making investments
b. deciding how much money to allocate to each asset type
c. choosing assets with regard only to return and not to risk
d. choosing the percentage or distribution of investments to make within each asset type

Explanation:

Diversification in finance (a sub - field of Business) involves spreading investments across different assets. Option A is incorrect as it's impossible to eliminate all investment risk. Option C is wrong because both return and risk are considered. Option B is about asset - allocation in general, not diversification. Option D correctly describes diversification as distributing investments within each asset type.

Answer:

D. Choosing the percentage or distribution of investments to make within each asset type