Kyle puts a greater proportion of his portfolio into government bonds.Kyle's action
A)increases both risk and the average rate of return.
B)decreases both risk and the average rate of return.
C)increases risk,but decreases the average rate of return.
D)decreases risk,but increases the average rate of return.

Question

Quizplus · Accepted Answer

Government bonds are generally considered low-risk investments, but they also tend to offer lower returns compared to stocks or other higher-risk investments. Therefore, by increasing the proportion of his portfolio in government bonds, Kyle decreases both risk and the average rate of return.

Kyle Puts a Greater Proportion of His Portfolio into Government