Investing All Your Money in One Company Is an Example

question 73

Multiple Choice

Investing all your money in one company is an example of:

• A)risk diversification.
• B)risk pooling.
• C)risk aversion.
• D)None of these are true.

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Definitions:

Primacy and Recency Effects

Psychological terms describing the tendency to remember information that appears at the beginning (primacy) and end (recency) of a list better than information in the middle.

Memory

The cognitive process of encoding, storing, and retrieving information.

Retrieval

The process of accessing and bringing into conscious awareness information stored in memory.

Stored Information

Information that is retained in the brain or another storage system for retrieval and use at a later time.