1 answer

Enlarge Image mom 1) Using this chart, which statement is ACCURATE? Slott Bonda Stocb-Band Mutual Fundo...

Question:

Enlarge Image mom 1) Using this chart, which statement is ACCURATE? Slott Bonda Stocb-Band Mutual Fundo Bond-Based Mutual Fun
Enlarge Image mom 1) Using this chart, which statement is ACCURATE? Slott Bonda Stocb-Band Mutual Fundo Bond-Based Mutual Funds A) Potential Return B) Cathering ol Dapom Investing with few risks is a reason for choosing bonds. Investing in stocks bring high risks and potentially high rewards. Investing in a certificate of deposit is riskier than investing in bonds. Investing money in a stock-based mutual fund grows as fast as money invested in a bond. Saving Accounts C) LOW DOW HIGH D) Risk 2) Carlos wants to invest money for two years. He is risk-averse, but Wants to earn the best rate of return in that time period. Of the choices listed, Carlos would be MOST Likely to invest in A) stock-based mutual funds. B) certificates of deposit. stocks D) bonds

Answers

1.

Answer: B

As per the graph, stock is in the highest place, where the corresponding risk and return both are high. Therefore, it gives high rewards at the cost of high risk.

Other options are not relevant here.

2.

Answer: B

Since the person is risk averse, he should not invest in risky affairs (like mutual funds, bonds, and stocks). He is completely reluctant to take risk and should search an investment where his money will be the safest but still can earn the best return. The certificate of deposit is the best here.

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