Question

What does it mean to “diversify” your portfolio?


Putting your money in funds that come with high fees since they are guaranteed to perform better.


Pooling your money into one fund so that you can more easily manage your investments.


Spreading risk by investing your money in a variety of funds and investment options.


Investing all of your money into 1-2 funds so that you can focus on making money through compound interest.

Answer 1

Answer:

The correct answer is letter "C": Spreading risk by investing your money in a variety of funds and investment options.

Explanation:

Portfolios are pools of different assets that aim lowering the risk inherent in investments. Portfolios tend to be managed by professional who work on behalf of investors an can provide suggestions on what assets to buy and sell according to the fluctuations of the market.