Question

When you assess portfolio diversification, how many 2x2's should you use to assess it ? select an answer: as many as needed 2 1 3 ?

Answer 1

Generally, two 2x2 matrices should be used to assess portfolio diversification. The first 2x2 matrix can be used to examine the diversity of the different asset classes, while the second 2x2 matrix can be used to analyze the diversity of the asset classes within each specific industry. This can help to identify any potential risks or imbalances that exist in the portfolio and can be used to develop an appropriate strategy to address those risks