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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
Diversification - who benefits more company or shareholders?
Diversification can benefit both companies and shareholders, but in different ways. For companies, diversification can reduce risk by spreading investments across various markets or products, potentially leading to more stable revenue streams. Shareholders benefit from diversification as it can lead to increased stock value and reduced volatility, providing a safer investment environment. However, if a company's diversification is poorly executed, it may lead to inefficiencies that can negatively impact shareholder value.
How is diversification related to risk?
Diversification is a risk management strategy that involves spreading investments across various assets or sectors to reduce exposure to any single investment's volatility. By holding a diverse portfolio, the impact of poor performance in one asset can be offset by better performance in others, thereby lowering overall risk. This approach limits the potential for significant losses and helps stabilize returns over time. Essentially, diversification helps to smooth out the unpredictable nature of markets and minimizes the likelihood of catastrophic financial outcomes.
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.
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
Does Motorola use related diversification?
Yes, Motorola employs related diversification by expanding its product offerings within the telecommunications and electronics sectors. The company has historically developed complementary products, such as mobile devices, communication infrastructure, and accessories, that align with its core competencies. This strategy allows Motorola to leverage its brand and technological expertise across related markets, enhancing overall competitiveness.
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.
