Why is it important to consider risk and return when building an investment portfolio for a company? Provides examples of how an appropriate balance between risk and return can impact the financial stability and growth of a company in the long term. Explains the concept of diversification in the context of investment portfolio management and how it can reduce overall portfolio risk and volatility. Analyzes the benefits of diversification in relation to the correlation between different asset classes (stocks, bonds, etc.) and its impact on reducing systematic and non-systematic risk. Critically evaluates the possible limitations and risks associated with excessive or inadequate diversification, and suggests one (1) strategy to avoid these problems.