19
QuizMultiple Choice

Investing

Question 19 • Personal Finance - EL3403

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 money across different investments rather than relying on just one. If one investment loses value, another may gain, helping offset the loss and reduce the overall risk. It does not necessarily increase liquidity or reduce returns.

AI-written and checked against the verified answer.

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