4
QuizMultiple Choice

Investment Strategy, Risk, and Behavioral Finance — Quiz

Question 4 • Personal Finance

Which situation would most likely increase a person’s risk tolerance?

Answer
A
Needing money soon.
B
Having limited financial knowledge.
C
Having stable income and long-term goals.
D
Feeling uncertain about losses.

Explanation

A stable income can make a person better able to absorb investment losses, while long-term goals give investments more time to recover from short-term declines. Together, these factors can increase risk tolerance. Needing money soon or feeling uncertain about losses generally lowers risk tolerance, and limited financial knowledge does not typically increase it.

AI-written and checked against the verified answer.

Previous
Next