Question

If an investor possesses a portfolio heavily concentrated in bank checking accounts, a financial advisor would most likely suggest which of the following aggressive investments to diversify the portfolio?

A. A money market account
B. An Individual Retirement Account
C. Certificates of Deposit
D. Stocks

Answer 1

Answer:

D) Stocks

Explanation:

Having your money on checking accounts is probably very safe, but will not generate a high return. You could balance your portfolio by investing on stocks that have the potential to generate much higher returns and are still a relatively save long term investment (or medium risk investment depending on the type of stocks).