Kaoru wanted to retire early so he placed his free money in high-risk stocks. Unfortunately, the country entered a recession and the stock market dropped significantly. Kaoru lost most of the money he had invested. What option would have most likely insulated Kaoru from the market crash?
A) asset portfolios
B) underwriting
C) futures contracts
D) diversification
E) institutional investments

Question

Quizplus · Accepted Answer

Diversification is the strategy of spreading investments across various financial assets to reduce exposure to any single asset or risk. This approach could have helped Kaoru mitigate the losses from the market crash by not having all his money tied up in high-risk stocks.

Kaoru Wanted to Retire Early So He Placed His Free