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The principle of diversification tells us that: Group of answer choices spreading an investment across many diverse assets will eliminate all of the total risk. spreading an investment across many diverse assets will eliminate all of the systematic risk. spreading an investment across five diverse companies will not lower the total risk. spreading an investment across three companies all within the same industry will greatly reduce the systematic risk. spreading an investment across three companies will eliminate some of the unsystematic risk.

Respuesta :

The diversification tells us that spreading an investment across many diverse assets will eliminate all of the total risk. Thus the first option is correct.

What is Risk?

Risk refers to the situation will involves certain degree of the danger. Risk can be good or bad as it is very uncertain. If the risk is good it leads to profits to the business and vice versa.

The concept of the diversification refers to the investing in the different sectors in order to mitigate the losses in one particular sector. It is a kind of the calculated risk taken by the businessmen.

Thus the first option is correct that  spreading an investment across many diverse assets will eliminate all of the total risk.

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