1. Diversification refers to:

a. Spreading your money among various investments to reduce the impact of losses on a few investments.

b. Allocating your money among stocks, bonds, and commodities in a strategic way to anticipate changes in the markets.

c. Spreading your money among a small number of investments in hopes of maximizing the returns of those with high returns.

d. Allocating your money among stocks and bonds from firms operating in a single industry.

2. An advantage of investing internationally is:

a. portfolio volatility and higher returns can be achieved by taking no additional risk.

b. Low correlation reduces portfolio returns.

c. Low correlation between U.S. stocks and international stock which reduces investment risk.

d. The best investments are always overseas.