Case 2: Questions

1. Why is it important to diversify one's portfolio? (6 marks)

2. In the context of the case what are defensive and cyclical shares? How can these be combined
to form a diversified portfolio? (6 marks)
3. What are multi-asset funds? How do they help investors hold diversified portfolios? (6 marks)
4. Why do fund managers attempt to diversify across regions? (6 marks)
5. How does diversification across market capitalizations help? (6 marks)