19
QuizMultiple Choice

Making Spending Decisions — Cumulative exam

Question 19 • ***CPS Online Personal Finance fall – 3-2027

Putting money into more than one kind of investment at a time is called

Answer
A
liquidity.
B
sunken cost.
C
diversification.
D
compound interest.

Explanation

Putting money into different kinds of investments is called diversification. It spreads investments across assets, which can help reduce the risk of relying on just one investment. Liquidity means how easily an asset can be turned into cash, while compound interest is interest earned on both the original amount and prior interest.

AI-written and checked against the verified answer.

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