: If you own a portfolio of five stocks and want to diversify, which would you be least likely to recommend? Gill, Madura. Personal Finance, 4th Canadian Edition 2019. p 323. Emboldenings are mine. Lee Ann would like

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I suspect it might have something to do with the amount of money concentrated in one spot.

With the others, Lee Ann can start with a small amount - the smallest purchasable parcel of bonds etc likely costs less than a cheap apartment. But property tends to come in big lumps - you can’t just buy a front gate today and slowly buy the rest of the house as you earn more money.

So if Lee Ann has 00 in each of 5 stocks and then has to pay 0,000 for one piece of real estate, it’s not diversifying - it is concentrating her exposure into real estate. The original 5 stocks end up as a small fraction of her total portfolio.

Caveats:

This depends on the numbers. If Lee Ann had 0,000 in each of the 5 stocks, putting 0,000 into real estate sounds reasonable as diversification.
You can probably justify why any of the multiple-choice answers works as ‘the’ correct answer. I expect this is why investment advisors want to know so much about someone’s full financial picture before making recommendations.
This answer isn’t financial advice.

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An income trust is a container for investments, not a type of investment. The bottom line is that "income trust" is the correct answer to a different question.

I do think, though, that (d) is also an acceptable answer.