Economics · Financial Markets
Which of the following is true about diversification in portfolio management?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It involves investing in only one asset class.
- 2It helps to capture returns across sectors and reduces volatility over time.✓
- 3It focuses on concentrating risk within a few high-performing investments.
- 4It guarantees consistent returns in every market condition.
Correct answer
It helps to capture returns across sectors and reduces volatility over time.
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