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| ''Risk management.'' | | ''Economics.'' |
| | | When a government's total expenditures exceed the revenue that it generates (excluding money from borrowings). |
| Diversification is the process of spreading risk to limit the possibility that a single adverse event could have a catastrophic effect.
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| Often referred to as 'Don't put all your eggs in the same basket'.
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| In corporate finance the term is often used to mean the process of ensuring that an investment portfolio is constructed such that all possible specific risk (diversifiable risk) is eliminated.
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| Diversification is a form of risk reduction.
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| However, some residual risks cannot be eliminated by diversification.
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| == See also == | | == See also == |
| * [[Cash in the new post-crisis world]] | | * [[Deficit]] |
| * [[Credit risk diversification]]
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| * [[Diversifiable risk]]
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| * [[Diversity]]
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| * [[Market risk]]
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| * [[Matching]]
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| * [[Portfolio]]
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| * [[Specific risk]]
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| [[Category:Risk_frameworks]]
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Revision as of 14:19, 23 October 2012
Economics.
When a government's total expenditures exceed the revenue that it generates (excluding money from borrowings).
See also