Question

mr. verma won rs. 35 lakh in a reality tv conteston 1st april 2014 and decided to invest in a diversified portfolio for safety returns​

Answer 1

Answer:

• One of the biggest advantages of diversification to you as an investment is it can actually increase your prospective profits and stabilise your outcomes.

Explanation:

• You lower your portfolio's total risk by having a variety of assets with diverse performance so that no one investment may go bad.
• Diversification is a crucial component to reducing investment risk.
• No single sector or asset class will have as much of an impact on the performance of the whole basket as other asset classes and sectors, so spreading your investments across a variety of them will help stabilise your returns.
• An investor's total level of unpredictability and possible risk are decreased by diversification. Other assets inside the portfolio can make up for losses when assets in one area underperform.

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