What is the difference between asset allocation and diversification?
A) Diversification is much more important than asset allocation in an investment strategy.
B) Asset allocation and diversification are the same.
C) Asset allocation is about risk and diversification is about reward.
D) Asset allocation is the types of investments you choose, diversification is how you spread your investments within each investment type.

Question

13-07-2022
Business

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What is the difference between asset allocation and diversification?
A) Diversification is much more important than asset allocation in an investment strategy.
B) Asset allocation and diversification are the same.
C) Asset allocation is about risk and diversification is about reward.
D) Asset allocation is the types of investments you choose, diversification is how you spread your investments within each investment type.

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Helppppp plz tell me the right answer

ewomazinoade ewomazinoade · Answer 1 · 2022-07-14T17:04:39+02:00

Asset allocation is the types of investments you choose, diversification is how you spread your investments within each investment type.

What is the difference between asset allocation and diversification?

Asset allocation are the choices of assets that is made in an investment strategy. Diversification is the process of picking assets that are uncorrelated with each other in order to reduce unsystematic risks.

For example, a person might choose to invest only in equity and buys only equity stocks. This is asset allocation. The person can decide to buy stocks in different industries in order to reduce unsystematic risk. This is diversification.

To learn more about diversification, please check: https://brainly.com/question/15259776

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