ECONOMICS
SAVING AND INVESTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Saving is for 5 years or less and investing is more than 5 years.
|
|
|
Saving is for 5 years or more and investing is less than 5 years.
|
|
|
Either A or B
|
|
|
None of the above
|
Detailed explanation-1: -The biggest difference between saving and investing is the level of risk taken. Saving typically results in you earning a lower return but with virtually no risk. In contrast, investing allows you the opportunity to earn a higher return, but you take on the risk of loss in order to do so.
Detailed explanation-2: -The difference between saving and investing Saving can also mean putting your money into products such as a bank time account (CD). Investing-using some of your money with the aim of helping to make it grow by buying assets that might increase in value, such as stocks, property or shares in a mutual fund.
Detailed explanation-3: -Experts generally advise building short-term savings and then investing whatever surplus cash you have left over. For this purpose, high-yield savings accounts are a great option because they come with zero risk-meaning your money will always be there.
Detailed explanation-4: -Savings means setting aside a part of your income for future use. Investment is defined as the act of putting funds into productive uses, i.e. investing in such investment vehicles which can reap money over time. People save money to fulfil their unexpected expenses or urgent money requirements.
Detailed explanation-5: -There is only one way in which you can double your money in 5 years and that is through mutual funds. Despite the market risks, mutual funds can earn significant returns in 5 to 6 years. This is because mutual funds offer higher returns than any other investment option and higher risk.