Typically, a risk averse investor has to have his investment portfolio more heavily weighted toward bonds...
Typically, a risk averse investor has to have his investment portfolio more heavily weighted toward bonds than stocks than would an investor who would be willing to accept more risk
correct or incorrect?
Homework Answers
Correct, yes typically a risk averse investor has to have his investment portfolio more heavily weighted toward bonds than stocks than would an investor who would be willing to accept more risk.
This is because the bonds are more risky to that of stock because bonds are more risk-free and return is secure and principal/capital is preserved. Whereas, Stocks are the riskiest investment because its price variability is much wider, so capital and return, both are unsecure.
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