14
QuizMultiple Choice

Variable Investments — Quiz

Question 14 • Financial Math

Anna buys a piece of land and expects its value to increase over time. The land's value is subject to real estate market fluctuations. Is this a variable investment, and why or why not?

Answer
A
No, because it offers fixed income.
B
Yes, because it guarantees the return of principal.
C
Yes, because it has variable returns.
D
No, because it is not affected by market conditions.

Explanation

A variable investment has returns that can change as market conditions change. Since the land’s value fluctuates with the real estate market, Anna’s eventual return is uncertain. Therefore, it is a variable investment, as stated in choice D.

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