Question

Caro has $10,000 to invest. Her best friend, Imelda, happens to be a stockbroker. Imelda tells Caro that her investments should be diversified. To make sure that Caro understand what diversification really means, Imelda asks her to rank a set of investment portfolios according to how diversified they are. Demonstrate how Caro's ranking should look below.

Answer 1

since the question is incomplete, I looked for a similar one:

1. the most diversified portfolio is: $3,400 in a mutual fund, $3,300 in bonds and $3,300 in land.
2. the second most diversified is: $10,00 in a mutual fund
3. the third most diversified: $5,000 in one stock and $5,000 in another
4. the least diversified: $10,000 in one stock

A mutual fund invests in different stocks and securities, so investing in a mutual stock is considered a diversified investment. But investing in mutual funds, bonds and land is even more diversified (you added 2 different typs of investments to an already diversified investment).