Liquidity risk is best hedged through diversification across time.

Credit risk is best hedged through diversification across uncorrelated credits.

Capitalist institutions include risk management schemes that provide insurance, hedging, and diversification.

This provides the level of counterpart risk diversification that the Fund will require.

Not only is there a risk of oversupply, but diversification is risky, and the risks must be reduced.

A fundamental principle of financial theory diversification or risk spreading implies that interest in the new contracts will be high.

Market risk is best hedged through a combination of diversification across assets and enough time to decide when to sell.

Diversification

6350 Import diversification

National diversification councils

National diversification councils

(b) An allocation to high yield bonds will provide further diversification benefits to the portfolio, more than compensating for the risk of this asset category

(c) Client diversification and

V. POTENTIAL FOR DIVERSIFICATION

II. DIVERSIFICATION WHICH WAY?

C. National diversification councils

1. Diversification of exports

However, given the diversity in the scope for diversification among LDCs, the reality of diminishing exposure of LDC economies to the risk of erosion is uneven.

(vi) Diversification can involve horizontal diversification into new commodities, vertical diversification whereby value is added to existing commodities, and the development of new end uses.

The establishment of a diversification fund, however, would, along with the proposed national diversification councils, provide the focal point for enhancing diversification efforts in Africa.

5.2 Diversification of intervention options

IV. THE CASE FOR DIVERSIFICATION

30. Diversification has three dimensions.

Location of the diversification facility

Resources of the diversification facility

Companies' motives for investing abroad include access to markets, natural resources and strategic assets such as brand names and technology, as well as risk diversification and improving efficiency.

52. A major constraint to promoting diversification is a lack of technically and economically viable diversification projects.

VI. ACCELERATING THE PROCESS OF DIVERSIFICATION

(h) Location of the diversification facility

(i) Resources of the diversification facility.

III. INSTITUTIONAL FRAMEWORK FOR COMMODITY DIVERSIFICATION

strengthening and diversification of production capacity

B. Global diversification and commodity market

D. Financing of national diversification councils

Energy saving and diversification measures

Economic and trade diversification could be crucial, and donor commitments to investment in economic diversification could be essential.

Diversification can be for increased exports, including to regional markets as well as for meeting domestic requirements. Export diversification usually involves production diversification, for which there is considerable potential in Africa.

II. ISSUES RELATED TO THE DIVERSIFICATION OF AFRICAN ECONOMIES, WITH PARTICULAR REFERENCE TO THE DIVERSIFICATION OF THE COMMODITY SECTOR

The resources provided by the diversification facility would be used primarily to prepare diversification projects at the country level.

Second, it does not stimulate economic diversification.

This supports income generation and diversification activities.

V. POTENTIAL FOR DIVERSIFICATION . 29 40 16

VII. RESOURCES FOR DIVERSIFICATION, INCLUDING EXTERNAL SUPPORT

Diversification facility for the African commodity sector

(ii) Extent of diversification of economic base