Why is an investment portfolio containing a mix of stocks and bonds less risky than one containing
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Why is an investment portfolio containing a mix of stocks and bonds less risky than one containing a single asset class?
- Because the markets for stocks and bonds tend to move in the same direction at the same time.
- Because bonds typically have a high variance and stocks typically have a low variance.
- Because stocks and bonds are positively correlated.
- Because stocks and bonds are negatively correlated.
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