Trissy2459
contestada

*ECONOMICS*
Why is diversification an important part of many capital formation strategies?

O A. It ensures that investors will not lose all their capital if one
investment fails.
B. It focuses capital into a single high-yield stock that will produce
large gains quickly.
C. It allows investors to cash out their savings quickly instead of
waiting for growth.
D. It guarantees that an investment will have a steady rate of return
over time.

Respuesta :

Answer:

A. It ensures that investors will not lose all their capital if one investment fails.

Explanation:

A P E X

The diversification is the one of the important part of the capital formation because it ensures that investors will not lose all their capital if one investment fails. Thus option (A) is correct.

What is the meaning of Diversification in Investment ?

Diversification refers to the strategy which helps in the growth of the business and the new market. In the case of the investment diversification refers to the strategy in which investment is put in various different sector by the investor.

The diversification is the best technique used by the investor to invest in different sector in order to not to bear losses in the any particular sector.

Therefore, it ensures that investors will not lose all their capital if one investment fails. Thus option (A) is correct.

Learn more about diversification  here:

https://brainly.com/question/4171408

#SPJ2

Otras preguntas