Question

Which of the following would be considered the highest risk portfolio?
A) A portfolio made up of 20% savings accounts, 50% mutual funds, and 30% bonds.
B A portfolio made up of 40% mutual funds, 40% Treasury bonds, and 10% stocks.
C A portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds.
D A portfolio made up of 70% mutual funds, 10% stocks, and 20% Treasury bonds.

Answer 1

Solution :-

The correct answer of this question is option (C).

Explanation -

Option (C) has portfolio with 60 % stocks, 30 % Mutual funds and 10 % Treasury Bonds.

This investor has invested more than half of his money in stocks and the prices of stocks fluctuate daily. The stocks may give good return on the money invested but investing in stocks is highly risky. One must avoid the stocks, if he or she wants to safeguard his saved money.

Answer 2

C A portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds.