The theory of portfolio selection leads to the conclusion that
A)there is one best asset for each investor.
B)there is one best asset for all investors.
C)savers should allocate their savings among many different assets.
D)savers should concentrate their savings in as few assets as possible.

Question

Quizplus · Accepted Answer

The theory of portfolio selection suggests that savers should not concentrate their savings in as few assets as possible but should instead allocate their savings among many different assets. This helps to diversify the risk and potentially increase returns. There is no one best asset for all investors or even for each investor, as individual preferences and risk tolerance play a significant role in determining the optimal portfolio.

The Theory of Portfolio Selection Leads to the Conclusion That