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Indirect diversification benefits |
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Indirect diversification benefitsDiversification benefits provided by the multinational corporation that are not available to investors through their portfolio investment.Indirect diversification benefits Similar MatchesInternational diversificationInternational diversificationThe attempt to reduce risk by investing in more than one nation. By diversifying across nations whose economic cycles are not perfectly correlated, investors can typically reduce the variability of their returns. Naive diversificationNaive diversificationA strategy whereby an investor simply invests in a number of different assets in the hope that the variance of the expected return on the portfolio is lowered. In contrast, mathematical programming can be used to select the best possible investment weights. Related: Markowitz diversification. Liquidity diversificationLiquidity diversificationInvesting in a variety of maturities to reduce the price risk to which holding long bonds exposes the investor. Principle of diversificationPrinciple of diversificationThat portfolios of different sorts of assets differently correlated with one another will have negligible unsystematic risk. In other words, unsystematic risks disappear in diversified portfolios, and only systematic risks persist, those related to particular assets. Cone of diversificationCone of diversificationSee diversification cone. Further SuggestionsCurrency diversificationUnique Diversification Benefit Diversification cone diversification Markowitz diversification Diversification Sector diversification Efficient diversification |
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