Ryerson Says: "Money Is Hard to Come By, So When

question 55

Short Answer

Ryerson says: "Money is hard to come by, so when one has money one should make sure that, above all, one doesn't lose it. One hears a lot of success stories about people making a lot of money by investing, but of course you don't hear about the people who lose money investing. As risky as it is, based on so many unknown factors, investing your money really is like gambling. The only prudent plan is to keep money in a savings account where it can earn a predictable amount of interest. One can't lose money that way, at least, so with money in a savings account one can always count on it being there for future needs."
Groh responds by saying: "Investing is inherently risky, but the risk need not be insurmountable. It is true that the more potential there is for a higher return, the higher the chance is also for more money to be lost. But there are more and less risky ways to invest, and even the less risky investments can give a significantly higher return than a simple savings account. When one diversifies one's stock holdings, one increases the chances of getting a good return among one's holdings, and decreases the damage from a loss in value. Also, even if stocks lose value temporarily, the value of stocks overall has always gone up over long periods of time. So a savings account, while it may seem prudent and safe, is probably not the best way to ensure that money is being saved in the most optimal way possible."
Which of the following, if true, would undermine Groh's point about diversification?
Not every investor can afford every stock.
The value of some stocks drop and never recover.
When one stock value drops, others tend to also drop.
Some investors prefer as little risk as possible when investing.
The value of some stock is greater than others.

---

Definitions:

Sexual Practices

Various behaviors or activities individuals engage in as part of their sexual lives, influenced by personal, cultural, or societal norms.

Sexual Misinformation

Incorrect or misleading information regarding sexual health, behaviors, and norms that can impact individuals' understanding and decisions.

Sexual Dysfunction

A medical term that refers to a problem occurring during any phase of the sexual response cycle, preventing individuals or couples from experiencing satisfaction from sexual activity.

Sexual Disorder

A condition that prevents or interferes with a person's ability to enjoy or engage in normal sexual activity, including dysfunctions and paraphilias.