Question: Suppose that the expected return to the U . S . stock market shrinks considerably. In fact, the risk premium to bonds is 3 .

Suppose that the expected return to the U.S. stock market shrinks considerably. In fact, the risk premium to bonds is 3.9% and the risk premium to stocks is 4.0%.
What portfolio would the 30-years-to-retirement investor pick?
Group of answer choices
100% bonds, 0% stocks
85% bonds, 15% stocks
100% stocks, 0% bonds
50% bonds, 50% stocks

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