[startupcfo]

“Which of the following types of risk can be reduced by diversification?” was an MCQ question that got me stuck, because I believe all 4 choices could be reduced by diversification

A.

High interest rates – can be reduced by buying bonds with different durations

B.

Inflation – you could add more equities to your portfolio

C.

Labor strikes – You could invest in companies with varying levels of dependence on labor

D.

Recessions – you could invest in defensive stocks like gun manufacturers and discount places like Walmart/Costco

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Corporate finance leader

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