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b. compounding

The correct answer is: c. diversifying

One of the most important ways to lessen the risk of losing money when you invest is to diversify your investments. It's common sense – don't put all your eggs in one basket. If you buy a mixture of different types of stocks, bonds, or mutual funds, your entire savings will not be wiped out if one of your investments fails. Since no one can accurately predict how our economy or one company will do, diversification helps you to protect your savings.

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Question 5, Answer b