Which of the Following Is NOT an Example of a Security

question 169

Multiple Choice

Which of the following is NOT an example of a security?

• A) preferred stock
• B) municipal bond
• C) Treasury bills
• D) All are examples of a security.

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Definitions:

Diversification

Diversification is an investment strategy that involves spreading investments across various financial instruments, industries, and other categories to reduce exposure to any single asset or risk.

Increase Risk

The action or process of raising the level of danger or the chance of loss in a financial investment or business venture.

Expected Rate

The predicted interest rate or return for an investment over a specific period.

Diversification Effects

The reduction in risk achieved by investing in a variety of assets, thus minimizing the impact of poor performance from any single asset.