Elena is excited to invest, but she is worried that she might lose her investment funds by making risky investments. How could Elena use diversification to manage her risk?(1 point) Responses Elena could purchase multiple assets from multiple sources. Elena could purchase multiple assets from multiple sources. Elena could invest all of her funds into a single low-risk investment. Elena could invest all of her funds into a single low-risk investment. Elena could forego investing altogether. Elena could forego investing altogether. Elena could invest some of her funds into a single low-risk investment and pocket the rest as cash. Elena could invest some of her funds into a single low-risk investment and pocket the rest as cash.

Answer 1

Elena could purchase multiple assets from multiple sources. This means spreading her investment funds across different types of investments, such as stocks, bonds, real estate, and commodities. By diversifying her portfolio, Elena reduces the risk of losing all her funds if one investment performs poorly. If one investment underperforms, other investments may potentially offset the losses, leading to a more balanced overall return.