Which of the Following Is True

question 637

Multiple Choice

Which of the following is true?

• A) People who invest in the stock market are virtually certain to make money.
• B) Investors in the stock market can reduce their risk if they hold shares of specific stocks for only short periods of time.
• C) The risk of stock market investments can be reduced through the holding of a diverse portfolio of unrelated stocks over long periods of time.
• D) In the long run, corporate bonds can be expected to yield a higher real rate of return than ownership of stocks.

---

Definitions:

Convertible Securities

Financial instruments, such as bonds or preferred shares, that can be converted into another type of security, typically shares of the issuing company's stock.

Daily Trading

The practice of buying and selling financial instruments within the same trading day, aiming to exploit short-term market movements.

New York Stock Exchange

One of the largest stock exchanges in the world, located in New York City, serving as a marketplace for buying and selling stocks and securities.