ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Stocks aren’t as safe as cash, savings accounts or government debt, but they’re generally less risky than high-fliers like options or futures. Dividend stocks are considered safer than high-growth stocks, because they pay cash dividends, helping to limit their volatility but not eliminating it.

Detailed explanation-2: -Examples of low-risk investing include buying treasury securities, corporate bonds, money market mutual funds, fixed annuities, preferred stocks, common stocks that pay dividends and index funds.

Detailed explanation-3: -Low-risk investing means buying assets that are less likely to incur significant losses than, say, more unpredictable stock picks. Low-risk investment options can include cash management accounts like certificates of deposit, Treasury securities like Series I bonds, and even stock options like preferred stocks.

Detailed explanation-4: -A low-risk investment is a place where you can earn reliable returns without putting your capital at risk, meaning there is a small chance of you losing your money. These range from cash investments that earn a fixed amount of interest, to investments in low volatility stock market securities.