SIE Exam Question 403: Answer and Explanation

Question: 403

Diversification is a very effective way for an investor to mitigate:

• A. business risk
• B. market risk
• C. monetary risk
• D. longevity risk

Correct Answer: A

Explanation:

A: As described in the explanation to question #67 above, diversification is an effective way to reduce exposure to business risk.