alleryStart learning →What can diversification honestly promise an investor?
AThat no investment will ever lose money
BThat returns will beat the market average
CA federally insured floor under losses
DReduced harm compared to being undiversified
Answer & Solution
Correct answer: D. Reduced harm compared to being undiversified
1. Spreading money across investment types is a core habit.
2. Diversification cannot guarantee that investments will not suffer.
3. What it offers is smaller damage than you would take undiversified.
_Source: "Saving and Investing: A Roadmap to Your Financial Security" (US SEC, public domain), section Investing_
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