2
AssignmentMultiple Choice

Investing

Question 2 • GA-GSE Personal Finance and Economics

What is a reasonable approach to investing in penny stocks?

Answer
A
Invest only if you are directly contacted by a broker.
B
Avoid completely because they are low-cost.
C
Treat with caution because they have uncertain rates of return.
D
Invest with confidence because they are so low-cost.

Explanation

Penny stocks can have highly uncertain returns and may be difficult to research or sell. Their low price does not make them safe or guarantee a profit, so a reasonable approach is to treat them with caution because their rates of return are uncertain.

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