Finance School of Management Diversifying Holding similar amounts of many risky assets instead of concentrating all of your investment in only one .o Example: investing in the biotechnology business initial capital: $100,000 probability of success: 50% uncertainty: quadrupling the investment or losing the entire investment independence of successes uesTc 3434 Finance School of Management Diversifying ❖ Holding similar amounts of many risky assets instead of concentrating all of your investment in only one. ❖ Example: investing in the biotechnology business – initial capital: $100,000 – probability of success: 50% – uncertainty: quadrupling the investment or losing the entire investment – independence of successes