15
QuizMultiple Choice

Investment Strategies — Quiz

Question 15 • Economics

Which investor is making a common error?

Answer
A
someone who sells the slumping stock while they are still able to make a profit based on what they paid
B
someone who buys stock in both domestic and more risky international companies
C
an employee of a popular hardware store who invests only in that company’s stock
D
an employee of a popular software company who invests in many similar companies

Explanation

Investing only in the stock of the company you work for concentrates your savings in one company. If that company struggles, both your job and your investment could lose value at the same time. This lack of diversification is a common investing error, so the hardware-store employee is making the error.

AI-written and checked against the verified answer.

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