One feasible way to hedge labor income is to ________.

A) diversify your investment portfolio away from the industry in which you work
B) save for retirement only from investment income
C) change careers every 7 years
D) invest heavily in the stock options provided by your firm

Question

Arturo Jimenez · Accepted Answer

Final Answer : A, Explanation :  By diversifying your investment portfolio away from the industry in which you work, you reduce your exposure to economic shocks that may affect your industry and therefore your labor income. This way, you can rely on returns from investments in other sectors to buffer against potential income volatility in your current job. Saving for retirement only from investment income (B) may not be feasible for most people, as labor income is often the primary source of income for many individuals. Changing careers every 7 years (C) may not be a realistic option for everyone, and it also comes with its own set of risks and uncertainties. Investing heavily in the stock options provided by your firm (D) is not a prudent way to hedge labor income as it exposes you to company-specific risks and lacks diversification.

One feasible way to hedge labor income is to ________.

A) diversify your investment portfolio away from the industry in which you work
B) save for retirement only from investment income
C) change careers every 7 years
D) invest heavily in the stock options provided by your firm

Definitions

Learning Objectives

Learning Objectives

Related questions

One feasible way to hedge labor income is to ________.A) diversify your investment portfolio away from the industry in which you workB) save for retirement only from investment incomeC) change careers every 7 yearsD) invest heavily in the stock options provided by your firm

Definitions

Learning Objectives

Learning Objectives

Related questions

One feasible way to hedge labor income is to ________.

A) diversify your investment portfolio away from the industry in which you work
B) save for retirement only from investment income
C) change careers every 7 years
D) invest heavily in the stock options provided by your firm