In the Markowitz Portfolio Approach,risk is reduced by:
A)the diversification of assets.
B)the correlation between assets.
C)investing in arrangements that return cash to the firm at different times.
D)investing in real assets rather than derivatives.

Question

Quizplus · Accepted Answer

The Markowitz Portfolio Approach suggests that risk can be reduced through diversification of assets. By holding a portfolio of assets with different characteristics and performance, overall risk can be lowered while maintaining potential returns.

In the Markowitz Portfolio Approach,risk Is Reduced By