Final answer:
Investing in a range of industries and countries, known as diversification, can decrease portfolio risk as it spreads exposure and reduces the impact of any single investment's poor performance.
Step-by-step explanation:
Studies have indeed shown that investing in different industries and countries can reduce portfolio risk. This strategy, known as diversification, involves purchasing stocks or bonds from a wide array of companies and potentially different markets to mitigate the risks inherent in investing in a single company or sector. By diversifying, the impact of any one firm's poor performance is likely to be lessened by the better performance of other investments in the portfolio, smoothing out the overall return and reducing volatility. As different markets and industries will not move in the same direction at the same time, investors protect themselves against significant losses. Therefore, the statement that diversifying across various industries and countries decreases portfolio risk is true.