4
QuizMultiple Choice

Building a Diversified Investment Strategy — Quiz

Question 4 • Personal Finance

What is risk tolerance?

Answer
A
The level of risk a person is willing to accept
B
The total return earned
C
The amount of money invested
D
The time horizon of an investment

Explanation

Risk tolerance is the level of uncertainty or potential loss a person is willing to accept when making an investment. It describes comfort with risk, not the total return, amount invested, or investment time horizon. Therefore, the correct choice is “The level of risk a person is willing to accept.”

AI-written and checked against the verified answer.

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