Question

Diversification increases risk from agriculture. Is it true?

Yes

No

​

Answer 1

no

because

Diversification can help an investor manage risk and reduce the volatility of an asset's price movements. ... You can reduce the riskassociated with individual stocks, but general marketrisks affect nearly every stock and so it is also important todiversify among different asset classes.

Answer 2

Answer:

In the agricultural context, diversification can be regarded as the re-allocation of some of a farm's productive resources, such as land, capital, farm equipment and labour to other products and, particularly in richer countries, to non-farming activities such as restaurants and shops. Factors leading to decisions to diversify are many, but include: reducing risk, responding to changing consumer demands or changing government policy, responding to external shocks and, more recently, as a consequence of climate change.