Which of the following would be considered the highest risk portfolio?

A. A portfolio made up of 20% savings accounts, 50% mutual funds, and 30% bonds.
B.A portfolio made up of 40% mutual funds, 40% Treasury bonds, and 10% stocks.
c.A portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds.
d.A portfolio made up of 70% mutual funds, 10% stocks, and 20% Treasury bonds.
I pick C.

To determine which portfolio would be considered the highest risk, we need to evaluate the allocation of assets and the risk associated with each asset class.

A. Portfolio A consists of 20% savings accounts, 50% mutual funds, and 30% bonds. Bonds are generally considered less risky than stocks or mutual funds. Therefore, Portfolio A would likely have a lower risk compared to other portfolios.

B. Portfolio B consists of 40% mutual funds, 40% Treasury bonds, and 10% stocks. This portfolio has a higher allocation to stocks, which tend to be more volatile compared to bonds. However, the inclusion of Treasury bonds partially balances out the risk. Overall, Portfolio B has a moderate level of risk.

C. Portfolio C consists of 60% stocks, 30% mutual funds, and 10% Treasury bonds. With a higher allocation to stocks, Portfolio C is generally considered riskier than Portfolios A and B. Therefore, it has a higher level of risk.

D. Portfolio D consists of 70% mutual funds, 10% stocks, and 20% Treasury bonds. Similar to Portfolio B, this portfolio has a higher allocation to mutual funds and bonds, which generally have lower risk compared to stocks. Therefore, it would have a lower risk compared to Portfolio C.

Based on the given options, Portfolio C with 60% stocks would be considered the highest risk portfolio.

To determine which portfolio is considered the highest risk, we need to evaluate the asset allocation within each portfolio. Generally, higher allocations to stocks and lower allocations to safer assets like bonds and savings accounts indicate a higher risk. Let's analyze each portfolio:

A. 20% savings accounts, 50% mutual funds, and 30% bonds - This portfolio has a relatively balanced allocation with a moderate portion in savings accounts and bonds, suggesting a lower risk.

B. 40% mutual funds, 40% Treasury bonds, and 10% stocks - This portfolio has a relatively higher allocation to Treasury bonds, which are considered safer, alongside a larger allocation to mutual funds. While it has some allocation to stocks, which are generally riskier, this portfolio has a balanced distribution and may be considered moderately risky.

C. 60% stocks, 30% mutual funds, and 10% Treasury bonds - This portfolio has a substantial allocation to stocks, which are generally considered high-risk assets, along with a moderate allocation to mutual funds. With a smaller allocation to bonds, this portfolio is relatively riskier compared to the previous ones.

D. 70% mutual funds, 10% stocks, and 20% Treasury bonds - This portfolio has a majority allocation to mutual funds, which are generally considered less risky than stocks. The smaller allocation to stocks and Treasury bonds adds some moderate risk, but in comparison, this portfolio seems less risky than the one in option C.

Based on the analysis, the portfolio mentioned in option C with 60% stocks, 30% mutual funds, and 10% Treasury bonds is considered the highest risk portfolio.

I agree.