To Reduce the Risk of Investing in an Individual Stock

question 310

Multiple Choice

To reduce the risk of investing in an individual stock, an ownership position in many different companies can be achieved by purchasing shares in a(n)

• A) indexed security.
• B) mutual fund.
• C) diversification bond.
• D) stock cooperative.

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Definitions:

MP3 Player Market

Refers to the commercial segment involved in the manufacturing and selling of digital audio players that play music and media stored in the MP3 format.

Relative Advantage

The degree to which a new product or service is perceived as better than existing alternatives by consumers.

System 1

Refers to the fast, instinctive, and emotional way of thinking, as opposed to the slower, more logical System 2.

Microsoft Windows

Microsoft Windows is a group of several proprietary graphical operating system families, developed and marketed by Microsoft.