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Question 4 How can you reduce risk through diversification? by combining investments whose returns do not move together and t
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Diversification is a good measure to reduce risk. More investment having negative correlation means more diversification and more investment having positive correlation means less diversification, as correlation is the measure which increases risk, if it is positive between securities and decreases risk if it is negative between securities. so we should include more securities having negative correlation or not perfect positive correlation

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