ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Generally, a lower risk investment has a lower potential for profit. A higher risk investment has a higher potential for profit but also a potential for a greater loss.

Detailed explanation-2: -High-risk investments may offer the chance of higher returns than other investments might produce, but they put your money at higher risk. This means that if things go well, high-risk investments can produce high returns. But if things go badly, you could lose all of the money you invested.

Detailed explanation-3: -All investments carry some degree of risk. Stocks, bonds, mutual funds and exchange-traded funds can lose value-even their entire value-if market conditions sour. Even conservative, insured investments, such as certificates of deposit (CDs) issued by a bank or credit union, come with inflation risk.

Detailed explanation-4: -Over many decades, the investment that has provided the highest average rate of return has been stocks. But there are no guarantees of profits when you buy stock, which makes stock one of the most risky investments.

Detailed explanation-5: -Low-Risk Investment There is also less to gain-either in terms of the potential return or the potential benefit bigger term. Low-risk investing not only means protecting against the chance of any loss, but it also means making sure that none of the potential losses will be devastating.