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For example, "SecureFile.exe" will show as "SecureFile" in explorer or on your desktop, "PersonalImage.png" will show as "PersonalImage", and so forth.
If malware names itself "PersonalImage.png.exe", what do you think will happen?
Windows will only show you "PersonalImage.png". But when you try to open this 'image', malware will start and run on your machine.
Therefor, it would be best if you showed hidden file extensions to mitigate this potential problem.