How Can Investors Reduce the Risk Associated with an Investment

question 46

Multiple Choice

How can investors reduce the risk associated with an investment portfolio without having to accept a lower expected return?

• A) Wait until the stock market rises.
• B) Increase the amount of money invested in the portfolio.
• C) Purchase a variety of securities; i.e., diversify.
• D) Purchase stocks that have exceptionally high standard deviations.

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Definitions:

Effective Delegation

The skill of assigning tasks or responsibilities to others in a way that maximizes efficiency, development, and outcomes.

Development Tool

Resources or instruments utilized to facilitate personal, organizational, or technological growth and improvement.

Work Styles

The preferred ways individuals approach their tasks and interact with their colleagues in a work environment.

Three D's

A framework often referred to in business or personal productivity, standing for 'Do, Delegate, or Delete'.