Question

what is one major advantage of a capital formation strategy that focuses only on high-risk investments

Answer 1

Incomplete question. Options:

A. It protects the initial investment from losing any of its value.

B. It is a highly predictable strategy that guarantees stable growth.

C. It offers the possibility of extremely large returns over time.

D. It is the most diversified strategy for capital investment.

Answer:

C. It offers the possibility of extremely large returns over time.

Explanation:

It is noteworthy that a company that employs a capital formation strategy that focuses mainly on high-risk investments is seeking the major advantage of possibly getting extremely large returns over time from the investment.

Remember, with high-risk investments anything is possible, and so the high-returns is the underlying motivation that reduces any investor concerns of the risks.