Essay
Answer the following:
a)How is insurance similar to an individual's diversified portfolio?
b)Explain why holding a diverse portfolio of assets is important to minimizing the risk of an investment portfolio.
c)Given the importance of diversifying all of your financial assets,is it a good idea to own stock in the company for which you work,even if you own stock in other sectors? Explain why or why not.
d)A home is the most valuable asset for a majority of U.S.residents.Why do we not see more diversification in real estate ownership against loss of value due to market fluctuations?
Correct Answer:
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a)Insurance companies assume risks of di...View Answer
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