Since All Assets Typically Do NOT Move Together,how Can Investors

question 138

Multiple Choice

Since all assets typically do NOT move together,how can investors typically reduce risk?

• A) purchase only the best performing assets
• B) diversify one's portfolio across different asset classes
• C) avoid poor performing assets
• D) actively manage one's portfolio

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Definitions:

Thermal Energy

The internal energy of a system due to its temperature, related to the motion of its particles.

Molecular Energy

The sum of kinetic and potential energy at the molecular level, influencing the motion and interactions of molecules.

Chemical Reactions

Processes that involve the rearrangement of molecular or ionic structure of substances, resulting in new products.

Temperature

A measure of the average kinetic energy of the particles in a system, reflecting the system's thermal state or degree of heat.