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Explain the thought process and benefits of diversification of a portfolio of investments. That is, what is the reason that investors do so? What is

Explain the thought process and benefits of diversification of a portfolio of investments. That is, what is the reason that investors do so? What is the best/most efficient way to do so? At what point will an investor say "My portfolio has reached the highest (or extremely close) level of diversification it can"?

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