Question: In the field of finance, a diversified investment portfolio plays a crucial role in minimizing risk and maximizing returns. Consider the following scenario to evaluate the concept of diversification and its impact on investment outcomes: Mr. Smith, a prudent investor, is contemplating allocating his wealth across various asset classes. After conducting extensive research, he has shortlisted five different investment options that he believes will offer the best chance for diversification. Each investment option has distinct risk-return characteristics and belongs to different asset classes. The options are as follows: Option A: Blue-chip Stocks - Mr. Smith plans to invest in well-established, financially stable, and reputable companies with a proven track record of consistent growth. Option B: Government Bonds - Mr. Smith is considering investing in long-term government bonds that offer fixed interest payments and are considered low-risk investments. Option C: Real Estate Investment Trusts (REITs) - Mr. Smith is attracted to the potential income and capital appreciation provided by REITs, which invest in real estate properties and distribute a significant portion of their earnings to shareholders. Option D: Commodities - Mr. Smith is intrigued by the idea of investing in commodities such as gold, oil, or agricultural products as a hedge against inflation and economic uncertainties. Option E: Cryptocurrencies - Mr. Smith is interested in exploring the world of digital currencies, such as Bitcoin and Ethereum, for their potential high returns but is also aware of the significant volatility associated with these assets. Now, answer the following objective-type questions related to Mr. Smith's investment considerations: Which investment option is likely to provide Mr. Smith with a relatively stable income stream and is often considered a safe haven during economic downturns? a) Option A: Blue-chip Stocks b) Option B: Government Bonds c) Option C: Real Estate Investment Trusts (REITs) d) Option D: Commodities e) Option E: Cryptocurrencies If Mr. Smith is seeking long-term capital appreciation and is willing to take on moderate to high risk for potentially higher returns, which investment option should he consider? a) Option A: Blue-chip Stocks b) Option B: Government Bonds c) Option C: Real Estate Investment Trusts (REITs) d) Option D: Commodities e) Option E: Cryptocurrencies Which asset class is commonly associated with acting as a hedge against inflation, making it an attractive choice during periods of rising prices? a) Option A: Blue-chip Stocks b) Option B: Government Bonds c) Option C: Real Estate Investment Trusts (REITs) d) Option D: Commodities e) Option E: Cryptocurrencies Considering the potential for high returns and high volatility, which investment option requires a keen understanding of market dynamics and a risk-tolerant approach? a) Option A: Blue-chip Stocks b) Option B: Government Bonds c) Option C: Real Estate Investment Trusts (REITs) d) Option D: Commodities e) Option E: Cryptocurrencies If Mr. Smith aims to achieve a well-diversified investment portfolio that can help mitigate overall risk, which combination of investment options from the list above would be most suitable? (Select all applicable options) a) Option A and B b) Option A, C, and D c) Option B, C, and E d) Option C, D, and E e) Option A, B, C, D, and E (Note: In this question, multiple correct options may exist.)