Random diversification:
A) generally leads to optimal diversification.
B) does not lead to any diversification.
C) is the first step in the Markowitz portfolio selection model.
D) generally does not lead to optimal diversification.

Question

Quizplus · Accepted Answer

Random diversification generally spreads investments across various assets but does not necessarily consider the optimal mix of assets to minimize risk and maximize return, hence it usually does not lead to optimal diversification.

Random Diversification