The process of eliminating systematic risk through the purchase of a number of assets is called:
A) Portfolio reduction.
B) The systematic risk principle.
C) The beta principle.
D) The risk-reward slope.
E) Portfolio diversification.

Question

Quizplus · Accepted Answer

Portfolio diversification is the strategy of investing in a variety of assets to reduce exposure to any single asset or risk. This process helps in mitigating systematic risk, which is the risk inherent to the entire market or market segment.

The Process of Eliminating Systematic Risk Through the Purchase of a Number