8
QuizMultiple Choice

Investing

Question 8 • Personal Finance - EL3403

What is the definition of risk?

Answer
A
putting money into more than one investment
B
amount made in profit on an investment
C
using borrowed funds for an investment
D
possibility of losing money on an investment

Explanation

Risk is the possibility that an investment will lose value and you will lose money. Therefore, choice D, “possibility of losing money on an investment,” gives the definition. Putting money into multiple investments is diversification, while borrowed funds describe leverage.

AI-written and checked against the verified answer.

Previous
Next