Question

If an investor possesses a portfolio heavily concentrated in Certificates of Deposit, a financial advisor would most likely suggest which of the following aggressive investments to diversify the portfolio?

A. A money market account
B. An Individual Retirement Account
C. Bonds
D. Futures

Answer 1

A good financial manner is going to instruct a first time investor to check that he has enough money in savings in emergency cash for three to six months.

Then any money invested. E aware that you could loose 100 percent of it.

CDs are lucky to pay out 1 Percent. However, the first step would be a money market account. An IRA is a financial tool to put stocks or bonds into which could be intended to grow most aggressively if you have the time horizon of youth and can afford to loose money. That same term IRA could alternatively be intended to preserve capitol and have overweight of bonds. The mix and weighting of bonds to stocks favors bonds as we age. Futures is not something for the average investor and includes commodities.

Answer 2

The correct answer is D) Futures.

If an investor possesses a portfolio heavily concentrated in Certificates of Deposit, a financial advisor would most likely suggest an aggressive investment to diversify the portfolio. In this case, it should be "Futures."

Financial experts consider "Future Markets" as a place where investors buy and sell a commodity. Futures obligate investors to the exchange of an asset in a date specified in the future at a specific price, regardless of the market price at that moment. An example of a future market can be the New York Mercantile Exchange.