Angela is considering buying stock in a popular computer software company whose price has dropped significantly in the last year. Why might this be a wise move for Angela to make? because it is smart to buy when prices are high and sell when prices are low because it is smart to buy when prices are low and sell when prices are high because her investment will be guaranteed by the government if the company fails because the company will rebound because she likes to use the products they sell

The best reason why buying stock in a company after its price has dropped significantly might be a wise move is: **Because it is smart to buy when prices are low and sell when prices are high.** ### Explanation: 1. **Buy Low, Sell High:** This is a fundamental investment strategy. Purchasing stocks when their prices are low allows investors to potentially benefit from future price increases. If the company's fundamentals remain strong or improve, the stock price may rebound, leading to profits when sold at higher prices. 2. **Option Analysis:** - **Option 1:** *"Because it is smart to buy when prices are high and sell when prices are low."* - **Incorrect.** This is the opposite of a sound investment strategy and would likely result in losses. - **Option 3:** *"Because her investment will be guaranteed by the government if the company fails."* - **Incorrect.** Most stock investments are not guaranteed by the government. If the company fails, investors can lose their entire investment. - **Option 4:** *"Because the company will rebound because she likes to use the products they sell."* - **While personal confidence in a company's products can be a factor, it doesn't guarantee a stock rebound.** Investment decisions should be based on comprehensive analysis rather than personal preference alone. ### Additional Considerations: - **Research:** Before investing, Angela should research why the stock price has dropped. Understanding the underlying reasons—whether they're temporary setbacks or indicative of deeper issues—can inform her decision. - **Risk Tolerance:** Investing in stocks that have declined in value can offer opportunities, but it also carries risks. Angela should assess her risk tolerance and consider diversifying her investments to mitigate potential losses. - **Market Trends:** Keeping an eye on market trends, economic indicators, and the company's financial health can provide insights into whether the stock is likely to recover. In summary, buying low with the intention to sell high aligns with proven investment strategies and is the most compelling reason among the provided options.