Ali has just received his annual bonus at work. He is considering various options regarding this money, but is wary about market dynamics. He considers the market to be too risky for investment. What is the best way for Ali to avoid market risks?

A) keeping money in a safe

B) diversifying his portfolio

C) investing only in real estate

D) investing only in the secondary market

Respuesta :

The correct option is B.
To avoid market risks, the best thing for Ali to do is to diversify his portfolio. Diversification of portfolio involves putting one's money in different  types of investment. If one invests in 5 different type of investment, in case one experiences loss in one of them, he will still have four other investments, that will bring profits for him. But if an investor put all his money in one investment, he can lose everything if things doesn't go as planned. 

Answer:

b diversifying his portfolio

Explanation:

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