An investor is building a portfolio and wants to balance risk and return. How might they use both investment-grade and junk bonds to achieve this?

• A. By avoiding bonds altogether and focusing on stocks.
• B. By investing only in junk bonds to minimize risk.
• C. By investing in a mix of investment-grade bonds for stability and junk bonds for higher potential returns.
• D. By investing only in investment-grade bonds to maximize returns.

Answer: (C)