Which of the Following Would Reduce the Risk of an Investment

question 562

Multiple Choice

Which of the following would reduce the risk of an investment in the stock market?

• A) investing in a portfolio of diverse firms
• B) holding the investment for a long period of time
• C) both a and b
• D) neither a nor b

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Definitions:

Timeliness

The quality of being done at the appropriate or advantageous time, particularly in the context of information being available when it is needed.

Verifiability

An accounting principle that ensures all information reported is backed by evidence and can be confirmed by independent observers.

GAAP

Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction.

Reliability

In accounting, it refers to the accuracy and consistency of financial reporting, ensuring that information faithfully represents the entity's financial condition.