ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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when you are closest to needing the money you invested
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when you are concerned about the diversity of your investment portfolio
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when you are an inexperienced investor
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when you first make the investment
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Detailed explanation-1: -The sooner you need the money, the lower your risk tolerance should be.
Detailed explanation-2: -An aggressive investor, or one with a high risk tolerance, is willing to risk losing money to get potentially better results. A conservative investor, or one with a low risk tolerance, favors investments that maintain his or her original investment.
Detailed explanation-3: -Savings, CDs, Money Market Accounts, and Bonds Some that are considered the safest also generate the least interest (or returns). The investment type that typically carries the least risk is a savings account. CDs, bonds, and money market accounts could be grouped in as the least risky investment types around.
Detailed explanation-4: -As you get closer to needing the money from an investment, what happens to your risk tolerance? It decreases, so you can’t handle as much risk.
Detailed explanation-5: -Money Market Funds. Fixed Annuities. Preferred Stocks. Treasury Notes, Bills, Bonds and TIPS. Corporate Bonds. Dividend-Paying Stocks. High-Yield Savings Accounts. Certificates of Deposit. More items