🎁BACK-TO-SCHOOL DEAL. Subscribe Now to get 40% OFF at only 8.49 USD/month, only valid until Sep 30th, 2024

Question

Question
Someone who diversifies investments is more likely to increase both risks and returns. offset their losses with gains. reduce both risks and returns. increase liquidity of investments.

Asked By ObsidianSkies99 at

Answered By Expert

Don

Expert · 3.7k answers · 3k people helped

Sign in to see the answer

Solution By Steps

Step 1: Understanding Diversification

Diversification involves spreading investments across various financial instruments, sectors, or regions to reduce risk. It is based on the principle that different assets perform differently under various market conditions.

Step 2: Impact on Risks

By diversifying, an investor reduces the risk of significant losses from a single investment performing poorly, as the negative impact is spread across multiple investments.

Step 3: Impact on Returns

Diversification does not guarantee profits or protect completely against losses. However, it aims to smooth out unpredictable events in a specific industry or segment by spreading the risk.

Step 4: Impact on Liquidity

Diversification can increase the liquidity of investments as it involves holding a variety of assets, some of which may be more liquid than others.

Final Answer

Someone who diversifies investments is more likely to offset their losses with gains.

🧑‍🏫 More Questions

Which in-text citation is formatted correctly in MLA style? Odysseus and his men "slept again above the wash of ripples. (Homer 68)." Odysseus and his men, "slept again above the wash of ripples. (Homer 68)" Odysseus and his men, "slept again above the wash of ripples." Homer (68) Odysseus and his men "slept again above the wash of ripples" (Homer 68). Mark this and return Save and Exit Next Submit

The genotype "PP" can best be described as hemizygous. homozygous. heterozygous.

Question 9 of 15 What is a use case of factorization in quantum computing? randomizing data sets code decryption simulating language patterns optimization of routes I don't know this yet. Give feedback on this question Sulłalt Ans Search

Identify correct statement from the following: Select the correct option(s) and click submit. Confidentiality is a process to prevent unauthorized alteration of information Authorization validates users' identity Accountability is a process to prevent repudiation None of the above options is correct Submit

Aware Testing Web... MyKaty Cloud Lenovo AP Computer Scien. What historical context is best situated for this document? Document 5 Source: "People's Party Platform," Omaha Moming World-Herald, July 5, 1892. [W]e seek to restore the govemment of the Republic to the hands of "the plain people," with which class it originated. . . Our oountry finds itself confronted by conditions for which thore is no precedent in the history of the world; . . . We pledge ourselves that if given power we will labor to correct those evils by wise and reasonable legislation, in accordance with the terms of our platform. We believe that the power of government - in other words, of the people - should be expanded (as in the case of the postal servioe) as rapidly and as far as the good sense of an intelligent people and the teaching of experience shall justify, to the end that oppression, injustice, and poverty shall eventually cease in the land. The Election of 1892 The rise of agrarian protest including such groups as The Grange and The Farmers Alliance The Major political parties were not meeting the demands/needs of the people All answers are acceptable. Oisestion 7 40 nts