ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -It is one way to balance risk and reward in your investment portfolio by diversifying your assets. Diversification is the practice of spreading your investments around so that your exposure to any one type of asset is limited. This practice is designed to help reduce the volatility of your portfolio over time.

Detailed explanation-2: -Diversification is the practice of building a portfolio with a variety of investments that have different expected risks and returns. Diversification can help protect you against events that would affect specific investments.

Detailed explanation-3: -Diversification involves spreading your investment dollars among different types of assets to help temper market volatility. As a simple example, all equity (or stock) investments and most fixed income (or bond) investments are subject to market fluctuation.

Detailed explanation-4: -The practice of spreading money among different investments to reduce risk is known as diversification. Diversification is a strategy that can be neatly summed up as “Don’t put all your eggs in one basket.” One way to diversify is to allocate your investments among different kinds of assets.

Detailed explanation-5: -Diversification is a risk management strategy that mixes a wide variety of investments within a portfolio. A diversified portfolio contains a mix of distinct asset types and investment vehicles in an attempt at limiting exposure to any single asset or risk.