Diversification Means

question 172

Multiple Choice

Diversification means

• A) allocating all your investment funds into one type of investment.
• B) buying investments on margin.
• C) being knowledgeable about the various types of investment opportunities.
• D) allocating your investment funds to several types of investments.

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Definitions:

Accounts Payable

Obligations owed by a company to suppliers or creditors for goods and services received but not yet paid for.

Basic Accounting Equation

The fundamental equation representing the relationship between a company's assets, liabilities, and equity; Assets = Liabilities + Equity.

Assets

Resources owned by a company that have economic value and can be converted into cash.

Liabilities

Financial obligations or debts that a company owes to external parties.