The correct answer is C) to reduce the risk and increase the return of your investments.
Diversifying your investments means spreading your money across a variety of different assets such as stocks, bonds, real estate, and commodities. This strategy is important because it helps reduce the risk of losing money in case one investment underperforms or fails. By diversifying, you are essentially putting your eggs in different baskets, which can help protect your portfolio from market volatility or fluctuations in specific sectors.
Additionally, diversification can also increase the potential return of your investments. While some investments may perform poorly, others may perform well, leading to an overall positive return. By having a mix of different asset classes or investments with varying risk profiles, you have a higher chance of earning returns from different sources, thus potentially increasing your overall investment returns.
Why is it important to diversify your investments?
to make sure you only invest in low-risk options (Choice B) to increase the risk and return of your investments B to increase the risk and return of your investments (Choice C) to reduce the risk and increase the return of your investments C to reduce the risk and increase the return of your investments
1 answer
1 answer