Reword the following information Diversification: Description: Diversification involves spreading investments across various financial instruments, industries, and other categories to reduce exposure to any single asset or risk. Effectiveness: It helps mitigate unsystematic risk, which is the risk specific to a particular company or industry. By investing in a variety of assets, negative performance in one area can be offset by positive performance in another. Hedging: Description: This involves using financial instruments or strategies to offset potential losses in other investments. Common hedging tools include options, futures, and forward contracts. Effectiveness: Hedging can protect against price fluctuations in commodities, currencies, or interest rates, thereby stabilizing profits or costs. Insurance: Description: Purchasing insurance transfers the risk from the individual or organization to an insurance company. Common types include property, liability, health, and life insurance. Effectiveness: Insurance is effective for covering risks that have potentially devastating financial consequences, like catastrophic events or lawsuits. Risk Transfer: Description: Similar to insurance, risk transfer involves contractual agreements in which one party agrees to assume the risk of another. This is often done through indemnity clauses in contracts. Effectiveness: Risk transfer is useful in legal agreements and partnerships, where clear delineation of respo