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Should a Person Who Is Risk Averse Hold a Portfolio

question 168

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Should a person who is risk averse hold a portfolio with no stock and only bonds?
Explain.


Definitions:

Cash Dividends

Payments made by a corporation to its shareholders from profits, distributing earnings in the form of cash.

Equity Securities

Equity securities represent ownership interest held in a company by investors in the form of shares of stock, which may generate income through dividends and potential appreciation.

Highly Liquid Securities

Financial instruments that can easily be converted into cash with minimal impact on their price.

Low-Risk Securities

Investments that have a lower chance of loss or default, often characterized by more stable returns.

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