Answer:
See below
Step-by-step explanation:
Diversification involves investing in different and diverse classes of assets. In diversification, the investor opts to spread his capital in several investment options rather than focusing on one investment vehicle.
Diversification is a risk management strategy. Since investments are spread in different classes of assets, the investor does not suffer total losses should the market progress in the unexpected direction one class of investments. Investment tools do not react the same to market events. In the case of uncertainties, some investments will make losses and other profits. This way, the investor's capital will not be wiped out.