2
QuizMultiple Choice

Investing and Financial Markets

Question 2 • Personal Finance - EL3403

Which is true about investments and risk?

Answer
A
Low-risk investments have a high return over the long run.
B
High-risk investments usually fail.
C
Safe investments are always somewhat profitable.
D
Every investment carries some degree of risk.

Explanation

Investments involve uncertainty: their value or return can change, so even investments considered relatively safe carry some risk. Low-risk investments do not necessarily earn high returns, and high-risk investments do not usually fail; they simply have a greater chance of loss as well as potential gain. Safe investments are not guaranteed to be profitable in every situation. Therefore, “Every investment carries some degree of risk” is true.

AI-written and checked against the verified answer.

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