By diversifying,the risk of holding stock
A)can be eliminated.On average over the past two centuries stocks paid a higher average real return than bonds.
B)can be eliminated.On average over the past two centuries stocks paid a lower average real return than bonds.
C)can be reduced but not eliminated.On average over the past two centuries stocks paid a higher average real return than bonds.
D)can be reduced but not eliminated.On average over the past two centuries stocks paid a lower average real return than bonds.

Question

Quizplus · Accepted Answer

Diversification helps in reducing the risk but not completely eliminating it. On average over the past two centuries, stocks have provided a higher average real return than bonds, making them an attractive investment option despite the inherent risk involved.

By Diversifying,the Risk of Holding Stock