Maury is currently invested in medium-quality preferred stock. What type of investment would you recommend to Maury if he says he wants to move up one notch in risk?
A) High-quality, stable common stocks
B) junk bonds
C) high-quality, cyclical common stocks
D) lower quality common stocks.
E) high-grade corporate bonds.

Question

Quizplus · Accepted Answer

Moving up one notch in risk from medium-quality preferred stocks would suggest selecting an investment with slightly higher risk. High-quality, cyclical common stocks fit this description and would be a logical choice for Maury's investment goals. The other options either have too much risk (junk bonds and lower quality common stocks) or too little risk (high-grade corporate bonds and high-quality, stable common stocks) to be considered a one-notch increase in risk.

Maury Is Currently Invested in Medium-Quality Preferred Stock