22
QuizMultiple Choice

Investment Opportunities — Test

Question 22 • Advanced Financial Algebra

What is a significant risk associated with variable investments?

Answer
A
fixed principal amount
B
fixed interest rates
C
no guaranteed return of principal
D
guaranteed returns

Explanation

Variable investments can rise or fall in value, so the amount you get back is not guaranteed. This means you could receive less than you originally invested, making “no guaranteed return of principal” the significant risk. Guaranteed returns, fixed interest rates, and a fixed principal amount are not typical features of variable investments.

AI-written and checked against the verified answer.

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