Diversification is defined as:
A)spending less than is earned.
B)the distribution of wealth among different assets.
C)increasing the productive capacity of the economy.
D)the general rising level of prices.

Question

Quizplus · Accepted Answer

Diversification refers to spreading out investments among different types of assets, such as stocks, bonds, real estate, and commodities, in order to minimize risk and increase the chances of achieving better overall returns. A is related to budgeting, C is related to economic growth, and D is related to inflation, all of which are not equivalent to diversification.

Diversification Is Defined As