A Common Strategy to Reduce the Risk of a Large

question 191

Multiple Choice

A common strategy to reduce the risk of a large financial loss is to:

• A) buy and sell assets through a mutual fund since mutual funds cannot lose money.
• B) diversify financial assets so that their risks of failure are unrelated.
• C) buy financial assets from developing countries because the rates of return are very high and safe and their national currencies are much more stable than the U.S. dollar.
• D) buy real instead of financial assets.

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