based on the principle of diversification, is it a good idea for michelle to invest her retirement savings…

based on the principle of diversification, is it a good idea for michelle to invest her retirement savings in the stock of the company that she works for? a. no, because the stock of her company will do worse than other stocks. b. no, because her job - related income also depends on the company. c. yes, because it is safer than investing in stocks of other companies. d. yes, because she wants to get rich if the companys products take off.

based on the principle of diversification, is it a good idea for michelle to invest her retirement savings in the stock of the company that she works for? a. no, because the stock of her company will do worse than other stocks. b. no, because her job - related income also depends on the company. c. yes, because it is safer than investing in stocks of other companies. d. yes, because she wants to get rich if the companys products take off.

Answer

Brief Explanations:

The principle of diversification aims to reduce risk by spreading investments. If Michelle invests her retirement savings in the stock of the company she works for, she is highly exposed to the risk of that single - company. Her job - related income already depends on the company. If the company performs poorly, she could lose both her job and a large portion of her retirement savings. So, it's not a good idea.

Answer:

B. No, because her job - related income also depends on the company.