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How is diversification related to risk and return?
Diversification is related to risk and return because it involves spreading investments across different assets to reduce risk. By diversifying, investors can potentially lower the overall risk of their portfolio while still aiming for a competitive return. This strategy helps to minimize the impact of any single investment performing poorly, thus balancing the trade-off between risk and return.
What is the diversification of Risk?
Diversification of risk means reduction of risk. Merely reducing risk (and thereby reducing return proportionately) doesn't amount to diversification. Diversification in its true sense represents systematic reduction of risk in such a manner that return per unit of risk increases. By K S JOLLY
What are some examples of unrelated diversification?
moving from what you were offering to a total new product, for example,if you were manufacturing clothes and then you move to food industries is a good example of unrelated diversification.
How does diversification affect financial institions credit risk exposure?
Generally, diversification helps reduce the overall credit risk exposure for financial institutions by reducing their overall expected chargeoff rates.
What type of risk is avoidable through proper diversification?
portfolio risk
When is a company likely to choose related diversification and unrelated diversification?
Hell to the prof
What are some examples of related diversification?
Procter & Gamble
What are some examples related diversification?
Procter & Gamble
Is shells acquisition off billiton related to diversification?
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What is Procter and gamble corporate level strategy?
Related diversification
What is concentric diversification?
concentric diversification Type of diversification where a firm acquires or develops new products or services (closely related to its core business or technology) to enter one or more new markets.
When is a company likely to choose related and when unrelated diversification?
Hell to the prof
What are diversification?
Different diversification rates for two clades of animals.
What is the abstract noun for diversify?
The abstract noun forms of the verb to diversify are diversification and the gerund, diversifying.A related abstract noun is diversity.
What is supplemental diversification?
Different diversification rates for two clades of animals
What are Diversification Rates?
Different diversification rates for two clades of animals.
The difference between concentric diversification and conglomerate diversification?
Concentric diversification occurs when a firm adds related products or markets. The goal of such diversification is to achieve strategic fit. Strategic fit allows an organization to achieve synergy. In essence, synergy is the ability of two or more parts of an organization to achieve greater total effectiveness together than would be experienced if the efforts of the independent parts were summed. Conglomerate diversification occurs when a firm diversifies into areas that are unrelated to its current line of business. Synergy may result through the application of management expertise or financial resources, but the primary purpose of conglomerate diversification is improved profitability of the acquiring firm. Little, if any, concern is given to achieving marketing or production synergy with conglomerate diversification.
