Economists believe that as a saver's wealth increases, the saver will generally
A)increase his or her holdings of all assets proportionately.
B)increase the fraction of wealth held as cash.
C)increase the fraction of wealth held as common stock.
D)decrease the fraction held as corporate bonds.

Question

Quizplus · Accepted Answer

As a saver's wealth increases, they are more likely to increase the fraction of wealth held as common stock. This is because with more wealth, savers are often willing to take on more risk for the potential of higher returns, and stocks generally offer higher returns compared to other assets like cash or bonds, albeit with higher risk.

Economists Believe That as a Saver's Wealth Increases, the Saver