Empirical evidence indicates that adding a dividend exposure to a portfolio of non-dividend paying stocks has resulted in:
A) increased returns and decreased risk for the portfolio.
B) increased returns and increased risk for the portfolio.
C) decreased returns and increased risk for the portfolio.
D) decreased returns and decreased risk for the portfolio.

Question

Quizplus · Accepted Answer

Adding dividend-paying stocks to a portfolio of non-dividend paying stocks typically increases returns due to the additional income from dividends and decreases risk as dividend-paying stocks are often more stable and less volatile.

Empirical Evidence Indicates That Adding a Dividend Exposure to a Portfolio