16
practice testMultiple Choice

Practice Test

Question 16 • Personal Finance

Part A: What strategy involves spreading investments across multiple asset types?

Answer
A
speculation
B
market timing
C
diversification
D
benchmarking

Explanation

Diversification means spreading investments among different asset types to reduce the risk of relying too heavily on any one investment. Speculation involves taking risks in hopes of a large gain, market timing tries to predict when to buy or sell, and benchmarking compares performance with a standard.

AI-written and checked against the verified answer.

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