ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Inflation risk
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Political risk
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Industry risk
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Gambling
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Detailed explanation-1: -True, investing and gambling both involve risk and choice-specifically, the risk of capital with hopes of future profit. But gambling is typically a short-lived activity, while equities investing can last a lifetime. Also, there is a negative expected return to gamblers, on average and over the long run.
Detailed explanation-2: -Gambling involves an element of risk, typically a high probability of loss against a smaller probability of large gain. More generally, risky endeavors are those involving variable outcomes.
Detailed explanation-3: -One of the key differences between investing and gambling is diversification. Investing provides you with the opportunity to spread your risk across all asset classes, whereas gamblers throw their capital into a single pot with no loss mitigation strategy.
Detailed explanation-4: -Poker or other card games. Dice, video or board games for money. Car, horse or dog racing. Lottery games. Internet games using credit cards. Slot or electronic poker machines. Stock market. Games of skill, like pool, golf, darts or bowling. More items