Investing — Test Answers

24 verified answers
22
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Which option is best for a short-term goal requiring stability?

A
Stock portfolio
B
Cryptocurrency
C
ETF
D
Certificate of deposit (CD)
23
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What is mental accounting?

A
Calculating taxes
B
Budgeting expenses
C
Tracking investments
D
Categorizing money differently
24

Why do investors sell during downturns?

A
Taxes increase
B
Returns increase
C
Risk decreases
D
Emotional reactions
25

Why does diversification help reduce risk?

A
It guarantees profits.
B
All investments rise together.
C
Different investments perform differently.
D
It eliminates losses.

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