If an investor wishes to invest 100% of her portfolio in safe assets but does not wish to manage her portfolio,she should invest in __________.

Question

Quizplus · Accepted Answer

A money market fund invests in short-term, low-risk securities such as Treasury bills and CDs. By investing in a money market fund, the investor can achieve a high level of safety while also having the portfolio managed by a professional. Additionally, investing in several different money market instruments (choice C) may be unnecessary and potentially difficult to manage for an investor who does not wish to manage their portfolio. Growth stock funds (choice B) and several different stocks (choice D) are not safe assets and may be subject to significant volatility and potential losses.

If an Investor Wishes to Invest 100% of Her Portfolio