Based on the research evidence, related diversification appears to be a better strategy for portfolio management than unrelated diversification.

Question

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Research has shown that related diversification, where a company expands into businesses related to their existing products or services, is a better strategy for portfolio management compared to unrelated diversification, where a company enters into unfamiliar industries. Related diversification allows for sharing of resources and a better understanding of customer needs, leading to improved performance and higher financial returns.

Based on the Research Evidence, Related Diversification Appears to Be