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Q: What is portfolio diversification, and how does it reduce risk?
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- What does it mean that portfolio diversification can reduce risk, and how does the efficient frontier logically fit into this discussion? include correlation, asset allocation, and asset classes or benchmarks in your answer.Why does standalone risk differ from portfolio risk? Explain and give examples! Relates your answer with CAPM!Critically discuss the effect of diversification on portfolio risk. Is there any limit of diversification?
- How the risks could be diversified by using the portfolio theory?What is the purpose of diversification in an investment portfolio, and how does it reduce risk? Need help!How does the creation of a portfolio reduce risk? What type of assets should be included in a diverse portfolio? Why should they be included?
- What is the purpose of diversification in an investment portfolio, and how does it reduce risk?What statistical concept do many portfolio managers use to represent a risk when considering investment performance?How do an investment's required rate of return vary with perceived risk? Explain with an example?





