Answer :
The BEST example of diversification among the investments listed is a mutual fund.
Here's why:
1. **Mutual Fund**: A mutual fund pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. This diversification across various asset classes and securities helps spread risk. So, by investing in a mutual fund, an individual can achieve diversification without needing to select individual investments themselves.
2. **Savings Account**: A savings account is a low-risk investment option offered by banks, but it doesn't provide the same level of diversification as a mutual fund. It typically offers a lower return and is better suited for short-term savings goals rather than long-term investment diversification.
3. **Bond**: While bonds can be part of a diversified investment portfolio, they alone do not offer the same level of diversification as a mutual fund. Bonds are debt securities issued by companies or governments, and investing solely in bonds may not provide the desired level of risk diversification compared to a mutual fund.
4. **Stock**: Investing in individual stocks can be risky and lacks diversification. Stock prices are subject to the performance of the specific company, industry, or market sector, which can lead to higher volatility. Therefore, investing in a single stock does not offer the same level of diversification as a mutual fund that spreads investments across various companies and sectors.
In conclusion, a mutual fund stands out as the best example of diversification among the investment options provided. It allows investors to benefit from a diversified portfolio managed by professionals, which can help reduce risk and optimize returns over the long term.
