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Equity and government bonds are a natural pair in any well-diversified portfolio, because the price of stocks tends to increase in value, while bonds tend

Equity and government bonds are a natural pair in any well-diversified portfolio, because the price of stocks tends to increase in value, while bonds tend to decrease when times are good. The opposite is true during downturns.

Critically evaluate how this relationship works, explain how to lower overall risk in a portfolio. Use examples.

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