Answer:
Cody has invested $12,000 total. He has invested $3,000 in stocks, $2,000 in a certificate of deposit, and $5,000 in government bonds. Cody’s stocks are currently performing poorly. He has purchased $2,000 worth of an automotive company’s stock, and its value has steadily dropped over the last year. He is reluctant to sell the stock because he is worried about how much money he has already invested.
Which investment practice is Cody following?
✔ diversifying investments
Which investment shortcoming has he failed to avoid?
✔ focusing on sunk costs
Which step should Cody take to improve his investment portfolio?
✔ sell the failing stock
Step-by-step explanation: