Risk diversification refers to the process by which:
A)people organize themselves into a group to collectively absorb the cost of the risk faced by each individual.
B)insurance companies change their clients' risk aversion.
C)risks are shared across different people, reducing the impact of any particular risk on any one individual.
D)insurance companies reallocate the likelihood of catastrophes happening.

Question

Quizplus · Accepted Answer

Risk diversification is a strategy where risks are spread out among multiple parties or investments, thereby reducing the impact of any single risk on any one individual. This concept is widely used in finance and insurance to mitigate potential losses.

Risk Diversification Refers to the Process by Which