Question

Investors who are 30 to 50 years old tend to focus their allocation on ________ because they can afford the risk.

A) life insurance
B) stocks
C) bonds
D) a house

Answer 1

Investors who are 30 to 50 years old tend to focus their allocation on stocks because they can afford the risk. Stocks have the potential for high returns over an extended period of time, compensating for the higher degree of risk option involved. option b is answer

Step-by-step explanation:

Investors who are 30 to 50 years old tend to focus their allocation on stocks because they can afford the risk. Stocks have the potential for high returns over an extended period of time, compensating for the higher degree of risk involved. While stocks are risky in the short term, they typically offer a much higher return than other investment options such as bonds or bank accounts.

The tradeoff between the expected return and the degree of risk is particularly relevant here; while bonds and bank acounts offer lower risk, they also provide lower returns compared to stocks, which offer higher potential returns but also come with higher risk. option b is answer