Which type of portfolio might a young investor who is not afraid of risk choose?
a. a portfolio of with a high percentage of stocks b. a portfolio with a high percentage of conservative mutual funds c. a portfolio that is mostly cash d. a portfolio with a high percentage of treasury bonds.
The option A is correct. A portfolio with a high percentage of stocks might prefer a young investor who is not afraid of risk
The portfolio is the investment that contains the combination of equity, debt, stocks and mutual fund. It is basically the combination of different types of investment. A young investor who is not afraid of risk might choose those investment has a fluctuated returns and risk.
Justification for the correct and incorrect
A portfolio with a high percentage of stocks: This option is correct.
Stocks have a high risk and high returns. The young investor opts for this type of investment to get high returns with high risk.
A portfolio with a high percentage of conservative mutual funds: This option is incorrect.
The young investor is not preferred this as it does not carries high returns. There is no risk in mutual funds.
A portfolio that is mostly cash: This option is incorrect.
The young investor may not opt for this as this carries the cash only. The young investor has not preferred this cash investment.
A portfolio with a high percentage of treasury bonds: This option is incorrect.
The young investor has not preferred treasury bonds. Treasury bonds get the fixed return, the young investor will not prefer this.
1.Learn more about a stock portfolio
2.Learn more about earnings per share (EPS)
3.Learn more about stocks and bonds
Grade: Middle School
Chapter: Portfolio management
portfolio, young investor, afraid, risk, chose, percentage of stocks, conservative mutual funds, mostly cash, percentage of treasury bonds.
a. a portfol...