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3 of 5) Why would you want to diversify between sectors?
A. To make sure you get the maximum profit when one sector goes up
B. In case a sector-wide event causes all stocks to drop
C. Because every diversified portfolio has at least one energy stock and one technology stock
D. Because every portfolio should have ETFs

Respuesta :

Answer: B

Explanation: In case a sector- wide event causes all stocks to drop

Diversification can help control risk and reduce the volatility of an asset's price fluctuations. However, keep in mind that risk can never be totally avoided, no matter how well diversified your portfolio is.

So, Option B is correct.

The other Options are incorrect as:

  • Option A is incorrect as profit maximization is not a reason to diversify the sector reducing risk is the main reason.

  • Option C is incorrect as diversification is not because of diversification between energy or technology stock.

  • Option D is incorrect as ETFs are not a reason for sector diversification managing risk is the main reason.

Thus Option B is the correct reason for diversification between sectors.

For more information about Diversification refer to the link:

https://brainly.com/question/13982414