Elena is excited to invest, but she is worried that she might lose her investment funds by making risky investments. How could Elena use diversification to manage her risk?(1 point) Responses Elena could purchase multiple assets from multiple sources. Elena could purchase multiple assets from multiple sources. Elena could invest all of her funds into a single low-risk investment. Elena could invest all of her funds into a single low-risk investment. Elena could forego investing altogether. Elena could forego investing altogether. Elena could invest some of her funds into a single low-risk investment and pocket the rest as cash. Elena could invest some of her funds into a single low-risk investment and pocket the rest as cash.
Elena could purchase multiple assets from multiple sources.
Elena could purchase multiple assets from multiple sources.
Elena could use diversification to manage her risk by purchasing multiple assets from multiple sources. This means that instead of investing all of her funds into a single investment, she can spread her investment across different assets such as stocks, bonds, real estate, or commodities. By diversifying her portfolio, Elena reduces the risk of losing all her funds if one investment performs poorly. If she invests in different industries and sectors, she can further minimize her risk. Diversification can help Elena create a balanced portfolio that can withstand market fluctuations and potentially provide better returns in the long run.
