To address the objective of portfolios in the context of investment, it's essential to understand the role of diversification. Diversification is a strategy used to reduce risk by allocating investments across various financial instruments, industries, and other categories. This approach helps to mitigate the impact of any single asset's poor performance on the overall portfolio.

Let's break down the options:

1. **Return**: A portfolio's purpose isn't primarily to reduce returns.
2. **Risk**: This is a primary objective of diversification; reducing risk is a key benefit.
3. **Uncertainty**: While diversification can help manage uncertainty, the primary focus is on risk.
4. **Percentage**: This term is too vague in this context.

### Final Answer
The object of a portfolio is to reduce **b. Risk** by diversification.

Question

To address the objective of portfolios in the context of investment, it's essential to understand the role of diversification. Diversification is a strategy used to reduce risk by allocating investments across various financial instruments, industries, and other categories. This approach helps to mitigate the impact of any single asset's poor performance on the overall portfolio.

Let's break down the options:

1. **Return**: A portfolio's purpose isn't primarily to reduce returns.
2. **Risk**: This is a primary objective of diversification; reducing risk is a key benefit.
3. **Uncertainty**: While diversification can help manage uncertainty, the primary focus is on risk.
4. **Percentage**: This term is too vague in this context.

### Final Answer
The object of a portfolio is to reduce **b. Risk** by diversification.

Knowee AI · Accepted Answer

To address the objective of portfolios in the context of investment, it's essential to understand the role of diversification. Diversification is a strategy used to reduce risk by allocating investments across various financial instruments, industries, and other categories. This approach helps to mitigate the impact of any single asset's poor performance on the overall portfolio.

Let's break down the options:

1. **Return**: A portfolio's purpose isn't primarily to reduce returns.
2. **Risk**: This is a primary objective of diversification; reducing risk is a key benefit.
3. **Uncertainty**: While diversification can help manage uncertainty, the primary focus is on risk.
4. **Percentage**: This term is too vague in this context.

### Final Answer
The object of a portfolio is to reduce **b. Risk** by diversification.

The object of portfolio is to reduce ……by diversificationa.Returnb.Riskc.Uncertaintyd.Percentage

Question

The object of portfolio is to reduce ……by diversification

Solution

Final Answer

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