One way to diversify is to ________.
A)invest in both the stocks and bonds of a particular company
B)invest in both stocks and bonds from companies in different industries
C)learn both financial accounting and financial statement analysis
D)invest unlimited amounts of money

Question

Quizplus · Accepted Answer

Investing in both stocks and bonds from companies in different industries is a good way to diversify because it spreads the risk across different sectors. Investing in both stocks and bonds of a particular company (A) is not diversifying at all and puts all the risk in one company. Learning financial accounting and financial statement analysis (C) may be helpful in making investment decisions, but it does not necessarily diversify a portfolio. Investing unlimited amounts of money (D) is not a strategy for diversification but rather a matter of personal financial means.

One Way to Diversify Is to ________