Which of the following would reduce the risk of an investment in the stock market?
A) investing in a portfolio of diverse firms
B) holding the investment for a long period of time
C) both a and b
D) neither a nor b

Question

Quizplus · Accepted Answer

Investing in a portfolio of diverse firms and holding the investment for a long period of time both reduce the risk of an investment in the stock market. Diversification spreads risk across multiple companies and industries, while holding for a longer period of time allows for potential fluctuations in the market to smooth out over time.

Which of the Following Would Reduce the Risk of an Investment