6
QuizMultiple Choice

Investing — Quiz

Question 6 • Personal Finance and Economics

Someone who diversifies investments is more likely to

Answer
A
increase both risks and returns.
B
offset their losses with gains.
C
reduce both risks and returns.
D
increase liquidity of investments.

Explanation

Diversifying means spreading investments across different assets rather than relying on just one. If some investments lose value, others may gain, helping offset those losses and reducing overall risk. It does not necessarily increase liquidity or reduce returns.

AI-written and checked against the verified answer.

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