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3 years ago

Which is an example of a high-risk investment?

Business

2 answers:

vladimir1956 [14]3 years ago

6 0

The answer is A stock in a start-up company

Yuki888 [10]3 years ago

3 0

<u>The option A is correct. </u>

<u>Stock in a start-up company is an example of high-risk investment. </u>

Further Explanation:

High-risk investment is a type of investment that has a high risk and high return. The investment may grow beyond the expectation, the investor will earn a huge profit. The high-risk investment may fall beyond the expectation, the investor will incur a huge loss.

Justification for the correct and incorrect answer:

Stock in a startup company: This option is correct.

The startup company does not have a fixed share price. If the company may grow, the share price goes up. If the company may not grow, the share price goes down. This is a type of high-risk investment.

Bond: This option is incorrect.

The bond pays a fixed interest on the investment. As there is no risk, this is not a high-risk investment. Bond is a risk less investment.

CDs from an insured bank: This option is incorrect.

The full of from of CDs is a certificate deposit. As this investment is insured by the bank, there is no risk. This is the incorrect option.

401k plan: This option is incorrect.

401k plan is a type of retirement account that has been opened by the employers. This does not have any type of risk associated with it.

Learn more:

1. Learn more about retirement

<u>brainly.com/question/1430460 </u>

2. Learn more about life insurance

<u>brainly.com/question/2674013 </u>

3. Learn more about negotiating the plan

<u>brainly.com/question/10089477 </u>

Answer details:

Grade: Middle School

Subject: Accounting

Chapter: Investment

Keywords:

high-risk investment, 401k plan, stock, company, startup, high risk, expectation, may grow, bond, CDs from an insured bank, type of investment.

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