Phillip is a mortgage broker,who is paid by commission.When interest rates decline,he does a lot of business and earns a lot of money,as more people buy houses or refinance their mortgages.But when interest rates rise,business falls substantially.To diversify,Phillip should choose investments that
A)provide a higher return than the market average.
B)provide a lower return than the market average.
C)pay higher returns when interest rates rise and lower returns when interest rates fall.
D)pay lower returns when interest rates rise and higher returns when interest rates fall.

Question

Quizplus · Accepted Answer

By choosing investments that provide higher returns when interest rates rise and lower returns when interest rates fall, Phillip can offset the decline in his mortgage business when rates rise. This will help him diversify his income and reduce his dependence on the mortgage market, providing him with stability in his earnings.

Phillip Is a Mortgage Broker,who Is Paid by Commission