11
QuizMultiple Choice

Variable Investments — Quiz

Question 11 • Financial Math

Titus buys shares in a publicly traded company. The stock price and dividends fluctuate based on the company's performance. Is this a variable investment, and why or why not?

Answer
A
Yes, because the returns depend on market performance.
B
No, because the principal is guaranteed.
C
No, because it is risk-free.
D
Yes, because it offers fixed returns.

Explanation

A stock is a variable investment because its value and any dividends can change as the company performs and market conditions shift. Therefore, Titus’s returns are not fixed or guaranteed; they depend on market performance. Choice C correctly describes this.

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