ECONOMICS (CBSE/UGC NET)

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ECONOMICS

SAVING AND INVESTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which investment is described below?* By purchasing shares, you become part-owner of the company.* Risk is high because your money is not insured and your investment is not diversified.* Potential return on investment is high; if the company’s value increases, your rate of return increases.* Liquidity is high; you may withdraw your money at any time.
A
Stocks
B
Bonds
C
Certificates of Deposit
D
Money Market Accounts
Explanation: 

Detailed explanation-1: -Stocks, also known as shares or equities, might be the most well-known and simple type of investment. When you buy stock, you’re buying an ownership stake in a publicly-traded company. Many of the biggest companies in the country are publicly traded, meaning you can buy stock in them.

Detailed explanation-2: -Stocks. Owning stock means owning a portion of a company. It may be a minuscule stake, but it’s ownership. More broadly speaking, all traded securities, from futures to currency swaps, are ownership investments.

Detailed explanation-3: -While the product names and descriptions can often change, examples of high-risk investments include: Cryptoassets (also known as cryptos) Mini-bonds (sometimes called high interest return bonds) Land banking.

Detailed explanation-4: -Spread your portfolio among many different investment vehicles-including cash, stocks, bonds, mutual funds, ETFs and other funds. Stay diversified within each type of investment. Include securities that vary in risk.

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