Answer:
True.
Step-by-step explanation:
Diversification reduces portfolio volatility and can possibly boost returns.
Stocks - consider investing in companies of different sizes in an array of industries and sectors.
Debt securities - can help mitigate the losses of a bad year of stocks.
Cash - provides immidiate liquidity when you need it.
Why do companies diversify?
For growth in business operations.
To ensure maximum utilization of the existing resources and capabilities.
To escape from unattractive industry environments.
Types of diversification:
Horizontal diversification.
Vertical diversification.
Concentric diversification.
Conglomerate diversification.