Question

Maria is an investment adviser who is working through investment objectives and risk tolerance with a new client, Bobby. Bobby indicates that he'd like to see some capital appreciation, achieve at least some income, and wants to maintain a relatively high level of safety and principal protection. The BEST recommendation that Maria can make to Bobby is that Bobby invest in

Answer 1

The best recommendation that Maria can make to Bobby is that Bobby should invest in Federal Government Bonds and Treasury Bills.

However, it all depends on what his investments priorities and approach are. For a relatively high level of safety and principal protection, Federal Government Bonds and Treasury Bills are the best bet.

Any other investment that will offer some income will be too risky for safety.

Step-by-step explanation:

Risk appetite determines a person's investment profile. However, it must be clear that higher returns on investment go with higher risks. Every high return investment compensates for the high risks. It is even the riskiest not to invest. Risk should be studied and accepted when it cannot be avoided. We usually say, "you cannot eat your cake and have it."