A key benefit of diversification is to:

Diversification is a fundamental principle in investment strategy that aims to reduce the overall risk of investment losses. By spreading investments across various asset classes, industries, or geographic regions, an investor can minimize the impact that any single investment or market downturn may have on their overall portfolio.

When one investment performs poorly, others in the diversified portfolio may perform well, thereby balancing out the potential losses. This strategy relies on the fact that different investments often react differently to the same economic events. For instance, while stocks in a particular sector may decline due to market conditions, bonds or other asset classes may rise or remain stable.

The other choices do not align with the primary purpose of diversification. Maximal profits from single investments focus more on concentration rather than spreading risk. Guarantees of returns are unrealistic in investment strategies, as all investments carry inherent risks. Limiting exposure to only one market does not align with diversification; rather, it represents a concentrated investment strategy prone to higher risk. Thus, the essence of diversification rests in its ability to reduce risk while allowing for a more stable return potential over time.