Which of the following can be considered an impact of diversification in a portfolio?

The selection of enhanced stability as the impact of diversification in a portfolio is pertinent because diversification is fundamentally about spreading investments across a variety of assets. This approach limits exposure to any single asset's performance, which may be volatile. By holding a diverse array of securities—such as stocks from different sectors, bonds, and perhaps other asset classes—an investor is less likely to experience severe financial losses due to the downturn of any one investment.

For instance, if one sector of the economy underperforms, others might remain stable or even prosper, balancing overall portfolio performance. This stabilizing effect is a primary reason investors are encouraged to diversify. Therefore, enhanced stability is a direct result of the ability of different assets to perform independently of each other, which smooths out returns over time.

Other options fall short because increased risk contradicts the objective of diversification, which aims to reduce risk. Guaranteed returns are unattainable in investment markets, as all investments inherently carry some level of risk and uncertainty. Higher impact of singular assets would suggest a portfolio weighted heavily in one area, which is the opposite of what diversification seeks to create. Thus, the focus on stability via diversification stands out as the correct understanding of its beneficial impacts.