Diversification Intro/Vocab

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Econ

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5 Terms

1

Diversification

The strategy of spreading investments across various financial instruments, sectors, or other categories to reduce risk.

<p><span style="color: red"><strong>The strategy of spreading investments across various financial instruments, sectors, or other categories to reduce risk. </strong></span></p>
2

Investments

Assets that are allocated across different places to minimize volatility and potential losses.

<p><span style="color: red"><strong>Assets that are allocated across different places to minimize volatility and potential losses. </strong></span></p>
3

Reducing Risk

Achieved through diversification by spreading investments over multiple assets.

<p><span style="color: red"><strong>Achieved through diversification by spreading investments over multiple assets. </strong></span></p>
4

Sustainable Growth

A strategy that allows a business to grow without incurring excessive debt or compromising its financial stability.

<p><span style="color: red"><strong>A strategy that allows a business to grow without incurring excessive debt or compromising its financial stability.</strong></span></p>
5

Resilience to Shocks

The ability of an investment portfolio or business to withstand unexpected events or market fluctuations without experiencing significant losses.

<p><span style="color: red"><strong>The ability of an investment portfolio or business to withstand unexpected events or market fluctuations without experiencing significant losses. </strong></span></p>