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      Question

      The process of spreading investments across different

      assets or securities to reduce risk is called:
      A Asset allocation Correct Answer Incorrect Answer
      B Risk management Correct Answer Incorrect Answer
      C Portfolio diversification Correct Answer Incorrect Answer
      D Capital budgeting Correct Answer Incorrect Answer
      E Equity financing Correct Answer Incorrect Answer

      Solution

      Portfolio diversification involves investing in a variety of assets to lower the risk associated with any single investment.

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