Just two months after you put money into an investment its price falls 25 percent.Assuming that none of the investment fundamentals have changed,which of the following actions would evidence the greatest risk tolerance?

Question

Quizplus · Accepted Answer

Buying more of the same investment that has fallen in price requires a higher risk tolerance as it involves taking on more risk in the hope of greater returns in the future. Option A's action of selling to avoid worry demonstrates a lower risk tolerance, while option B's inaction suggests a moderate risk tolerance. Option D is not a viable or logical choice in this scenario.

Just Two Months After You Put Money into an Investment