Question: What is diversification? Explain why/how diversification reduces risk in a portfolio. Explain if a sample portfolio that holds stock in a company that makes sunglasses,

What is diversification? Explain why/how diversification reduces risk in a portfolio. Explain if a sample portfolio that holds stock in a company that makes sunglasses, one that makes umbrellas, and one that makes hats is diversified or not. If it is, can you further reduce risk (and how)? If it is not diversified, what changes would you make to diversify to a low-risk portfolio?

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