Question: Collins Wilson Ltd has recently established a private pension scheme for its employees. Required: The financial manager has asked you to provide a short report

Collins Wilson Ltd has recently established a private pension scheme for its employees. Required: The financial manager has asked you to provide a short report on why diversification generally leads to a reduction in risk relative to return. This report will be made available on the company website to inform employees on how the pension scheme manages both risk and return when selecting investable assets (including reference to forms of risk, covariance and Capital Asset Pricing Model)

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