Investors diversify portfolios: because diversified portfolios pay the highest r

Question

Investors diversify portfolios: because diversified portfolios pay the highest rates of return. because diversified portfolios are guaranteed not to lose money. To reduce the risk of losing their investment. To guarantee minimum returns on their investment. Mutual funds may contain. stocks only. bonds only. either stocks or bonds neither stocks nor bonds. Arbitrage occurs when. bond and stock rates of return equalize Investors try to profit from selling a lower rate of return asset to buy one rates of return across all stocks equalize. Investors move from lower to higher rate of return assets regardless of the

Explanation / Answer

15. Investors diversify portfolios to reduce the risk of losing their investment. Though it does not guarantee against loss , it does help minimizing the risk. OPTION C

16. Mutual funds may contain either stocks or bonds. OPTION C

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