20
QuizMultiple Choice

Making Spending Decisions — Cumulative exam

Question 20 • ***CPS Online Personal Finance fall – 3-2027

How does time generally affect the risk of an investment?

Answer
A
Short-term investments are generally less risky than long-term investments.
B
Long-term investments are generally more risky than short-term investments.
C
Time has no effect on the risk of an investment.
D
Short-term investments are generally more risky than long-term investments.

Explanation

Over a longer period, an investment has more time to recover from temporary market declines. With a short time horizon, a downturn may happen just when you need to sell, making short-term investments generally more risky than long-term investments.

AI-written and checked against the verified answer.

Previous
Next