QuestionAugust 17, 2025

If an investor possesses a portfolio heavily concentrated in futures, a financial advisor would most likely suggest adding which conservative investment to diversify the portfolio? Certificates of deposit Futures Mutual fund Stocks

If an investor possesses a portfolio heavily concentrated in futures, a financial advisor would most likely suggest adding which conservative investment to diversify the portfolio? Certificates of deposit Futures Mutual fund Stocks
If an investor possesses a portfolio heavily concentrated in futures, a financial advisor would most likely suggest adding which conservative investment to diversify the portfolio?
Certificates of deposit
Futures
Mutual fund
Stocks

Solution
3.8(292 votes)

Answer

Certificates of deposit Explanation 1. Identify Conservative Investment Certificates of deposit (CDs) are considered a conservative investment due to their low risk and fixed interest rate. 2. Evaluate Diversification Benefit Adding CDs to a futures-heavy portfolio reduces overall risk by introducing a stable, low-risk asset.

Explanation

1. Identify Conservative Investment<br /> Certificates of deposit (CDs) are considered a conservative investment due to their low risk and fixed interest rate.<br /><br />2. Evaluate Diversification Benefit<br /> Adding CDs to a futures-heavy portfolio reduces overall risk by introducing a stable, low-risk asset.
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