How does a portfolio with an equal split of 50% government bonds and 50% stocks compare to a portfolio made up solely of stocks in terms of return and risk?

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It offers both a reduced return and decreased risk.It delivers a lower return but increased risk.It provides a higher return along with reduced risk.It results in a higher return and greater risk.

Explanation

A portfolio balanced between government bonds and stocks typically yields a lower return than an all-stock portfolio but benefits from a reduced risk level due to the diversification effect. Conversely, portfolios with only stocks generally have higher returns but also higher volatility.