A proverb which says do not put all your eggs in one basket best explain

Question

A proverb which says do not put all your eggs in one basket best explain

A, vertical integration
B, merger
C,diversification
D,all of the above

Answer 1

C, diversification.

The proverb "do not put all your eggs in one basket" is often used to caution against relying too heavily on a single investment or strategy. This idea of spreading out risks and resources is most closely related to diversification. By diversifying investments or business operations, individuals and companies can minimize potential losses by not depending solely on one particular asset or market.

On the other hand, vertical integration refers to a company's expansion along the supply chain, where it takes control of multiple stages of production. This strategy can reduce costs and improve efficiency but does not directly relate to the proverb.

Similarly, a merger is when two companies combine to form a new entity. It can provide various benefits like increased market share, economies of scale, and synergies, but it doesn't directly relate to the idea of not putting all resources in one place.

Therefore, only diversification aligns with the proverb in question.

Answer 2

The correct answer is C, diversification. The proverb "do not put all your eggs in one basket" is often used to emphasize the importance of spreading out your investments or resources to reduce risk. In the context of business, it means that you should avoid putting all your resources, efforts, or investments into a single venture or strategy, as it carries higher risk. Diversification involves spreading investments across multiple sectors, industries, or assets to reduce exposure to any single risk or potential loss. Vertical integration and mergers are different strategies that do not directly correlate with the proverb.