You must add one of two investments to an already well- diversified portfolio. If you are a risk-averse investor,which one is the better choice?
A) Security A
B) Security B
C) Either security would be acceptable.
D) Cannot be determined with information given.

Question

You must add one of two investments to an already well- diversified portfolio.  If you are a risk-averse investor,which one is the better choice?
A) Security A 
B) Security B 
C) Either security would be acceptable. 
D) Cannot be determined with information given.

Quizplus · Accepted Answer

As a risk-averse investor, it is better to choose a security that is less risky. Without knowing the specifics of the two investment options, we can assume that Security A is the better choice as it poses a lower risk compared to Security B. This would help in maintaining the well-diversified nature of the portfolio while also minimizing the overall risk.

You Must Add One of Two Investments to an Already