The riskiest investments usually provide the highest return – but that doesn’t always mean they’re the best option. Diversification allows investors to diffuse risk by placing financial “eggs” into many baskets.
Watch the video to learn more about Risk Management, Assistance and Purchasing, then test your investing knowledge at the end of the lesson.
Stocks provide the highest return on your investment, but they also have no guarantees because their value can change often and suddenly.
A. True
B. False
A good portfolio blends the three investment types:
A. Cash equivalents, stocks, and bonds
B. 401(k) earnings, stocks, and bonds
C. Cash equivalents, stocks, and FSAs
D. Treasury bills, stocks, and pensions
Which of the following is a type of method used to minimize investment risk?
A. Average Percentage Yield
B. Direct Stock Purchase
C. Expense Ratio Coverage
D. Dollar Cost Averaging