As wealth increases, which of the following is likely to account for a smaller fraction of a saver's portfolio?
A)Corporate stock
B)Corporate bonds
C)Cash
D)U.S. government securities

Question

Quizplus · Accepted Answer

As wealth increases, savers are more likely to allocate a smaller fraction of their portfolio to holding cash because they have a greater capacity to take on risk and invest in securities with higher potential returns. Therefore, the correct choice is C, cash.

As Wealth Increases, Which of the Following Is Likely to Account