Reduction of risk by holding large number of securities in portfolio...

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Reduction of risk by holding large number of securities in portfolio of assets is classified as

A. diversification

B. selling ability

C. reduction ability

D. director ability

Answer: Option A

Solution (By Examveda Team)

Reduction of risk by holding large number of securities in portfolio of assets is classified as diversification. A diversified investment is a portfolio of various assets that earns the highest return for the least risk. A typical diversified portfolio has a mixture of stocks, fixed income, and commodities.

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