Question

the images show what happened to two people who invested $1,000.
gale starts with $1,000.
gales investments:

• savings account: $200, 1% return
• mutual fund: $600, 7% return
• stock: $200, -10% return

value one year later: $1,024
profit: $24
alex starts with $1,000.
alexs investments:

• stock: $1,000, -10% return

value one year later: $900
profit: ($100)
which investment advice would gale most likely give to alex?

• invest in stocks because they are less risky.
• put most of your money in a savings account instead.
• spread your investments in several different areas.
• stick with the stocks because they will bounce back.

Explanation:

Gale diversified investments (savings, mutual fund, stock) and made a profit, while Alex invested all in a single stock with a loss. Diversification (spreading investments) reduces risk, as seen in Gale's success. Other options are incorrect: stocks are risky, savings account alone may not grow much, and there's no guarantee stocks "bounce back."

Answer:

C. Spread your investments in several different areas.