Asked by: Aliya Bufornpersonal finance mutual funds
What is a diversified portfolio quizlet?
Last Updated: 3rd February, 2020
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Keeping this in consideration, what does it mean to diversify your portfolio?
A diversified investment is a portfolio of various assets that earns the highest return for the least risk. Diversification works because these assets react differently to the same economic event. In a diversified portfolio, the assets don't correlate with each other.
Also Know, why is portfolio diversification important quizlet? It is also important to diversify the investments because if the investor was to put all their money in one company, it could fail and then they would lose their money. The benefit of saving in an account that has a compound interest because it'll help the investor to earn interest.
Also to know, what does it mean to diversify your portfolio quizlet?
to hold more than 1 stock. For your stocks to not be all in the same area of the economy. To have a mix between stocks, mutual funds, or other securities.
What is a portfolio quizlet?
Portfolios. A collection of Assets (each asset will have its own level of potential risk and reward) The Expected Return of a Portfolio. The weighted average of the expected returns for each asset in the portfolio. The Risk-Return Trade-Off for a Portfolio.