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3 December, 11:31

A conservative investor has a portfolio that consists of diversified investments in equity securities, debt securities, and money market instruments. The investor is mildly concerned about a downturn in the stock market. If this investor were seeking to further diversify, which of the following would be the BEST recommendation?

[A] A Balanced Fund

[B] Real Estate-Related Investments

[C] A Hedge Fund

[D] Speculation in Equity Options

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Answers (1)
  1. 3 December, 14:37
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    Real Estate-Related Investments.

    Explanation:

    Real estate related investments involves the purchase, management, renting and sale of real estate properties with the aim of making profit.

    Real estate investment is capital intensive and has low liquidity compared to other forms of investment.

    This will be a good option for the conservative investor because real estate investment is stable and not prone to huge losses that can be incurred in the money markets. Also real estate is not affected by equities market. So will be a safety net in case of failure in the equity market.
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