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Diversification is the primary tool of portfolio managers to reduce risk without lowering expected returns. Maximum diversification is achieved by: Only investing in low-risk assets

Diversification is the primary tool of portfolio managers to reduce risk without lowering expected returns. Maximum diversification is achieved by:

Only investing in low-risk assets

Mixing high-risk and low-risk assets

Borrowing money to invest in assets

Constructing a portfolio of dissimilar assets

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