Asked by Yadelis Carmona gonzalez on Jul 12, 2024
Verified
The market for insurance is an example of diversification.
Diversification
The reduction of risk achieved by replacing a single risk with a large number of smaller, unrelated risks.
- Understand diversification and how it reduces risk in investment portfolios.
Verified Answer
MA
Maysa Al-HijaziJul 18, 2024
Final Answer :
True
Explanation :
In insurance, risk is pooled among many policyholders, spreading out the financial impact of individual losses, which is a form of diversification.
Learning Objectives
- Understand diversification and how it reduces risk in investment portfolios.