10
lesson pretestMultiple Choice

Pretest

Question 10 • Economics

What is the definition of risk?

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

Explanation

Risk is the possibility that an investment will lose value and you may lose money. The correct choice is “possibility of losing money on an investment.” Profit is a possible gain, while investing in multiple assets or using borrowed funds describes other investment strategies.

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