The owner a pro football team plans to diversify by purchasing shares in either a company that owns a pro basketball team or a pharmaceutical company. Which of these two investments are more likely to reduce the overall risk the owner will face? Why?© BrainMass Inc. brainmass.com March 4, 2021, 9:48 pm ad1c9bdddf
Risk is reduced when a portfolio is invested in different unrelated industry. The diversification in the portfolio is of primary importance as low trends in one can be equally by high in another.
Owning a pro football team ...
The solution explains how diversification works in portfolio management in 156 words.