Undiversified


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Undiversified

In risk management, the state of one's portfolio when it contains only a few securities or classes of securities. For example, if one invests exclusively in automotive companies or only in bonds, one has an undiversified portfolio. An undiversified portfolio carries a great deal of risk; for instance, if automotive companies or bonds perform poorly, it does not matter how well the rest of the market performs. On the other hand, the potential for gains is higher. In general, broader diversification equates to less risk and less return. See also: Markowitz Portfolio Theory.
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Therefore, our results are consistent with diversification strategies being used by undiversified family owners of family firms to diversify their personal wealth portfolios.
Management literature proposes the following definitions of risk: Business risk, resulting from variability in a firm's performance (Zahra, 2005); Ownership risk, the risk related to holding an undiversified share of equity (Fama & Jensen, 1983); Control risk, the risk of losing control over the company through excessive leveraging (Mishra & Mc Conaughy, 1999); Financial risk, used synonymously with control risk (Schulze & Dino, 2004).
Section 3 presents a short literature review relating to the value implications of undiversified investments.
I do hope these AaeexpertsAAE were able to conduct independent scientific and business studies without political pressures from the executive to solve some of LibyaAAEs pressing economic or social problems Au such as high unemployment and LibyaAAEs undiversified source of national income.
For many Americans, the equity in their home represents a large, undiversified portion of their portfolio.
The famines in Ireland in the nineteenth century and in Ethiopia in the late twentieth century provide clear evidence of the vulnerability of undiversified crops to environmental changes, and the dramatic consequences of such vulnerability for the population.
Over time, undiversified investments through ESOPs can be worth far less than half as much," he said
Such adjustments are especially useful in small, undiversified economies where domestic wages and prices are inflexible or where the cross-border movement of goods, labor, and financing is limited.
Their current practice is to simplify their investment decisions by positing a generic fictional shareholder who is undiversified in his investments as the person to whom they hold themselves accountable.
Furthermore, he calculates the cost of "insurance against the decline in his wealth attributable to his undiversified position within the DC plan" (p.