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Synonyms for diversifiable risk are idiosyncratic risk, unsystematic risk, and security-specific risk. Synonyms for non-diversifiable risk are systematic risk, beta risk and market risk. If one buys all the stocks in the S&P 500 one is obviously exposed only to movements in that index. If one buys a single stock in the S&P 500, one is exposed ...
Diversification (finance) involves spreading investments Diversification (marketing strategy) is a corporate strategy to increase market penetration Diversification of firms through mergers and acquisitions
Diversification could cost more: Fewer investments can be safer and more profitable than spreading money thinly across many. Yes, diversification can potentially limit portfolio losses, but only ...
Economies of scope make product diversification efficient, as part of the Ansoff Matrix, if they are based on the common and recurrent use of proprietary know-how or on an indivisible physical asset. [7] For example, as the number of products promoted is increased, more people can be reached per unit of money spent.
Similarly, diversification can manage price risk, on the assumption that not all products will suffer low prices at the same time. In fact, farmers often do the opposite of diversification by planting products that have a high price in one year, only to see the price collapse in the next, as explained by the cobweb theory. External threats ...
[4] Following on the naive diversification showed by children, Benartzi and Thaler turned to study whether the effect manifests itself among investors making decisions in the context of defined contribution saving plans. They found that "some investors follow the '1/n strategy': they divide their contributions evenly across the funds offered in ...
Economic diversity or economic diversification refers to variations in the economic status or the use of a broad range of economic activities in a region or country. [1] Diversification is used as a strategy to encourage positive economic growth and development. [ 2 ]
Diversification may allow for the same portfolio expected return with reduced risk. The mean-variance framework for constructing optimal investment portfolios was first posited by Markowitz and has since been reinforced and improved by other economists and mathematicians who went on to account for the limitations of the framework.