A Common Strategy to Reduce the Risk of a Large

question 368

Multiple Choice

A common strategy to reduce the risk of a large financial loss is to:

• A) buy and sell assets through a mutual fund since mutual funds cannot lose money.
• B) diversify financial assets so that their risks of failure are unrelated.
• C) buy financial assets from developing countries because the rates of return are very high and safe and their national currencies are much more stable than the Canadian dollar.
• D) buy real instead of financial assets.

---

Definitions:

Geographical Boundaries

Physical or political demarcations that define separate areas, regions, or territories.

Acquisitions

The process by which one company purchases most or all of another company's shares to take control.

Competitors

Businesses or individuals that compete within the same market for customers or resources.

Geographic Boundary

The defined physical demarcation of an area, region, or territory based on natural or artificial borders.