What is a diversified investment portfolio?

A diversified investment portfolio is a collection of different types of assets aimed at minimizing risk. This strategy involves allocating investments among various financial instruments, industries, and other categories to reduce the impact of any single asset's performance on the overall portfolio. By diversifying, investors can protect themselves against significant losses because when one investment loses value, others may gain or remain stable, thereby balancing the overall risk.

In contrast, the other options do not capture the essence of diversification. For instance, a fund that invests solely in real estate properties limits exposure to a single asset class, which increases risk rather than mitigating it. Similarly, a portfolio comprised only of government bonds lacks the variety needed to balance the risks associated with various investment types. Lastly, avoiding stock investments entirely means missing out on potential growth opportunities, which plays against the principle of diversification that seeks to manage and spread risk across various asset types. Thus, option A most accurately defines a diversified portfolio.