Which of the following investments is the focus of risk management through diversification?

The focus of risk management through diversification is best exemplified by the investment in a wide variety of assets. This strategy aims to spread risk across different types of investments, rather than concentrating it in a single asset or category. By holding a diverse mix of assets—such as stocks, bonds, real estate, and commodities—an investor can reduce the impact of any one investment's poor performance on the overall portfolio.

Diversification works under the premise that different assets react differently to market conditions. For instance, when stock prices fall, bonds may remain stable or even increase in value. This balance can help to mitigate the overall risk and volatility in an investment portfolio.

Moreover, unlike investments focused on just one type of asset, like high-yield stocks, government bonds, or real estate trusts, a diversified approach cushions against potential losses because the poor performance of one asset class can be offset by better performance in another. Thus, the broad-based investment across various asset classes is the cornerstone of a solid risk management strategy in investment portfolios.