ECONOMICS
RISK AND RETURN
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Knowing your investment is always safe
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You can spend freely, without concern for your financial future
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There is greater potential for high yield over a longer period
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You should choose stock with low risks
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Detailed explanation-1: -Young investors have the flexibility and time to study investing and learn from their successes and failures. Since investing has a fairly lengthy learning curve, young adults are at an advantage because they have years to study the markets and refine their investing strategies.
Detailed explanation-2: -The U.S. stock market has long been considered the source of the greatest returns for investors, outperforming all other types of investments including financial securities, real estate, commodities, and art collectibles over the past century.
Detailed explanation-3: -The general rule is that the younger you are, the more risk you’re able to tolerate. The older you get, though, means you must cut back on the amount of risk in your portfolio. The common rule of asset allocation by age is that you should hold a percentage of stocks that is equal to 100 minus your age.
Detailed explanation-4: -“High-yield investments” usually refer to corporate bonds issued by companies with low credit ratings & offer the potential for returns that top the market average. High-yield investments may seem attractive to many investors, especially after years of low interest rates on less volatile options.