ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Investing in one company’s stock is quite risky.
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Investing your whole savings in the stock market is a bad financial move.
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One year probably isn’t enough time for one stock to turn $700 into a month’s vacation.
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All of the above
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Detailed explanation-1: -Which of the following statements are true about the relationship between risk and return when it comes to investing? When it comes to investing, risk and return have a direct relationship, in that the riskier an investment, the higher its expected return.
Detailed explanation-2: -Do you know the Rule of 72? It’s an easy way to calculate just how long it’s going to take for your money to double. Just take the number 72 and divide it by the interest rate you hope to earn. That number gives you the approximate number of years it will take for your investment to double.
Detailed explanation-3: -What is the Rule of 72? The Rule of 72 is a calculation that estimates the number of years it takes to double your money at a specified rate of return. If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double. In this case, 18 years.
Detailed explanation-4: -The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors obtain a rough estimate of how many years it will take for the initial investment to duplicate itself.