6
lesson pretestMultiple Choice

Pretest

Question 6 • Economics

Someone who diversifies investments is more likely to

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