Mr. and Mrs. Jones want to invest for their retirement by buying stocks. Mr. Jones has heard about an up-and-coming stock and wants to invest $10,000 in it. Mrs. Jones thinks it would be more prudent to invest $10,000 in a mutual fund because it would be _____________ and therefore ______________.
a. quicker/more profitable
b. diversified/less risky
c. easier to understand/have a greater return
d. collectible/earn equity
b. diversified/less risky
Mutual funds buy a range of stocks or bonds from different companies. This diversification can offset some of the risks of individual stocks rising or falling.
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If the natural monopoly shown in the figure above is unregulated, then the deadweight loss will be
A) $0. B) $2 million. C) $4 million. D) $8 million.
An import quota is a limit on the
A) number of foreign workers allowed to work in a country. B) number of container ships allowed to enter the territorial waters of the United States. C) value of low-priced foreign goods that are allowed to be imported into the United States. D) amount of a product that may be imported.
The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P. If this economy opens to trade while the world price of a car is $6,000, and the government imposes a quota allowing 3,000 cars to be imported, then domestic equilibrium quantity of cars will be ________.
A. 12,000 B. 6,000 C. 10,000 D. 8,000
The gift exchange motive suggests that
A. workers prefer a nice work environment, even if they must accept lower wages. B. workers value benefits like health insurance more than job security. C. workers who feel well treated will work harder and more efficiently. D. workers will shirk if they are paid a low wage.