meredith puts all of her college savings into pepsi stock because she feels it will go up in value. gideon…

meredith puts all of her college savings into pepsi stock because she feels it will go up in value. gideon has his savings spread among several different stocks that are expected to do equally well in the future. whose portfolio of stocks is riskier? a. they are expected to do equally well so they are of equivalent risk. b. neither portfolio has any investment risk, whatsoever. c. gideons because he spread his money around several companies. d. merediths because all of her money is invested in one company.

meredith puts all of her college savings into pepsi stock because she feels it will go up in value. gideon has his savings spread among several different stocks that are expected to do equally well in the future. whose portfolio of stocks is riskier? a. they are expected to do equally well so they are of equivalent risk. b. neither portfolio has any investment risk, whatsoever. c. gideons because he spread his money around several companies. d. merediths because all of her money is invested in one company.

Answer

Brief Explanations:

Diversification reduces investment risk. Meredith has all her money in one - Pepsi stock, while Gideon spreads his savings among several stocks. If Pepsi performs poorly, Meredith loses everything. Gideon's multiple - stock portfolio is less affected by the poor performance of one company.

Answer:

D. Meredith's because all of her money is invested in one company.