This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: What is meant by diversifying an investment portfolio? What are the advantages of diversification? ... (Read 112 times)

storky111

  • Hero Member
  • *****
  • Posts: 561
on: Jun 29, 2018
What is meant by diversifying an investment portfolio? What are the advantages of diversification?
 
  What will be an ideal response?

Question 2

If the economy were truly made of industries that fit the textbook definition of perfect competition what do you expect would be a major disadvantage of this from the consumer's perspective?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Tonyam972

  • Sr. Member
  • ****
  • Posts: 342
Reply #1 on: Jun 29, 2018
Answer to Question 1

Diversification means that investors spread their investment across more than one asset. Diversification allows investors to reduce risk as individual assets are hit by different economic shocks. Putting a little bit of money in all of these different investment baskets reduces exposure to any single shock.
A-head: DIVERSIFICATION
Concept: Diversification

Answer to Question 2

One of the assumptions of perfect competition is that the products are all homogeneous. This would clearly reduce product variety across industries and eliminate consumer choice.


storky111

  • Hero Member
  • *****
  • Posts: 561
Reply #2 on: Jun 29, 2018
Thank you :)


Tonyam972

  • Sr. Member
  • ****
  • Posts: 342
Reply #3 on: Jun 29, 2018
Happy to help you


« previous next »
 

Did you know?

When blood is exposed to air, it clots. Heparin allows the blood to come in direct contact with air without clotting.

Did you know?

The effects of organophosphate poisoning are referred to by using the abbreviations “SLUD” or “SLUDGE,” It stands for: salivation, lacrimation, urination, defecation, GI upset, and emesis.

Did you know?

Over time, chronic hepatitis B virus and hepatitis C virus infections can progress to advanced liver disease, liver failure, and hepatocellular carcinoma. Unlike other forms, more than 80% of hepatitis C infections become chronic and lead to liver disease. When combined with hepatitis B, hepatitis C now accounts for 75% percent of all cases of liver disease around the world. Liver failure caused by hepatitis C is now leading cause of liver transplants in the United States.

Did you know?

Vital signs (blood pressure, temperature, pulse rate, respiration rate) should be taken before any drug administration. Patients should be informed not to use tobacco or caffeine at least 30 minutes before their appointment.

Did you know?

More than 34,000 trademarked medication names and more than 10,000 generic medication names are in use in the United States.

Relationships and diversification of the Bacteria and Archaea. Relationships and diversification of the Bacteria and Archaea.
An investment versus a bill An investment versus a bill
Routes of Drug Administration: Advantages and Disadvantages Routes of Drug Administration: Advantages and Disadvantages
The first five reactions constitute the energy-investment phase of glycolysis The first five reactions constitute the energy-investment phase of glycolysis
Saving and Investment Rates of Industrialized Countries, 1960–1974 Saving and Investment Rates of Industrialized Countries, 1960–1974
Investment in Computers as a Percentage of GDP, 1982–2009 Investment in Computers as a Percentage of GDP, 1982–2009
Video: Glycolysis Animation

For a complete list of videos, visit our video library