Final answer:
Diversification in asset allocation involves considering real estate holdings, portfolio size, and rate of return while avoiding similar investments.
Explanation:
Diversification is a critical strategy in asset allocation to reduce risk by spreading investments across various assets with independent returns. When considering asset allocation and diversifying a portfolio, factors like real estate holdings, portfolio size, and the rate of return are crucial. However, avoiding similar investments is not a consideration because true diversification involves investing in assets with different risk profiles and returns.
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