Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506893
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter ST3, Problem 1CQ
To determine
Results of investments in stock.
Expert Solution & Answer
Explanation of Solution
People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.
Economics Concept Introduction
Portfolio: Portfolio is a mixed investment in stock, bond, bank saving, and so on to get a high profit with low cost.
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Microeconomics: Private and Public Choice (MindTap Course List)
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