24
QuizMultiple Choice

Variable Investments — Quiz

Question 24 • Financial Math

Emmanuel puts his money in a savings account with a fixed annual interest rate of 1% Is this a variable investment, and why or why not?

Answer
A
No, because it is subject to market conditions.
B
Yes, because it offers variable returns.
C
No, because it provides fixed returns.
D
Yes, because the principal is not guaranteed.

Explanation

A savings account with a fixed annual interest rate of 1% earns interest at a predetermined rate, so its returns are fixed rather than variable. Therefore, it is not a variable investment. Choice D is correct: it provides fixed returns.

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