Question

The primary benefit of diversification is that it

A) is convenient.
B) is cheap.
C) reduces the exposure of your investments to adverse effects of any individual investment.
D) increases stock volatility

Answer 1

The primary benefit of diversification is that it reduces the exposure of your investments to adverse effects of any individual investment.

Step-by-step explanation:

The primary benefit of diversification is that it reduces the exposure of your investments to adverse effects of any individual investment.

Diversification is the practice of spreading investments across different assets or asset classes, such as stocks, bonds, and commodities.

By diversifying, investors can lower their risk by not putting all of their eggs in one basket.