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Management · Q239

Financial Management

Graduate and Post Graduate · Management · question 239

Q239

Diversification reduces _________.

A.
Interest rate risk
B.
Market risk
C.
Unique risk
Answer
D.
Inflation risk

Answer: Option C

Solution

Answer: Option C
Solution:
Diversification reduces Unique risk. Diversification is a technique that reduces risk by allocating investments among various financial instruments, industries, and other categories.