The Diversification of Mutual Funds Spells Safety, Because an Occasional

question 58

True/False

The diversification of mutual funds spells safety, because an occasional loss incurred with one investment is usually offset by gains from other investments.

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Definitions:

Emotional Response

An individual's psychological reaction to an external stimulus, which can involve feelings, behaviors, and physiological changes.

Physiological Changes

Alterations in the body's normal biological functions which can occur due to various factors such as stress, aging, or illness.

Physiological Changes

Alterations in the body's normal biological functions, which can occur due to factors like stress, emotional states, and environmental changes.

James-Lange Theory

A theory of emotion proposing that emotions occur as a result of physiological reactions to events.