Since all assets typically do NOT move together,how can investors typically reduce risk?
A) purchase only the best performing assets
B) diversify one's portfolio across different asset classes
C) avoid poor performing assets
D) actively manage one's portfolio

Question

Quizplus · Accepted Answer

Diversifying one's portfolio across different asset classes is typically the best way to reduce risk. This means investing in a mix of stocks, bonds, real estate, and other assets rather than relying on just one type of investment. This way, if one asset class performs poorly, the investor's losses are offset by gains in other areas of the portfolio. The other choices (A, C, and D) do not provide the same level of risk reduction as diversification.

Since All Assets Typically Do NOT Move Together,how Can Investors