Question

When constructing a risky portfolio consisting only of risky assets, an investment manager should offer _____. the same risky portfolio to all clients a customized risky portfolio to each client based on their required return a customized risky portfolio to each client based on their risk aversion a customized risky portfolio to each client based on their ability to cope with losses

Answer 1

When constructing a risky portfolio consisting only of risky assets, an investment manager should offer a customized risky portfolio to each client based on their risk aversion

Step-by-step explanation:

There is a fundamental unwritten rule about investment that stipulates higher returns for lower risk portfolios and lower returns for lower risk portfolios.

To make an informed decision, Investors opt for the services of investment managers to help construct a risky portfolio consisting of risky assets.

No two investor has the same degree of risk aversion.

Therefore, when constructing a risky portfolio consisting only of risky assets, an investment manager should offer a customized risky portfolio to each client based on their risk aversion.

Answer 2

Diversification

Step-by-step explanation:

When constructing a risky portfolio consisting only of risky assets, an investment manager should offer _Diversification____. the same risky portfolio to all clients a customized risky portfolio to each client based on their required return a customized risky portfolio to each client based on their risk aversion a customized risky portfolio to each client based on their ability to cope with losses