which is an example of a high-risk investment?\n\nstock in a start-up company\nbond\ncds from an insured…
which is an example of a high-risk investment?\n\nstock in a start-up company\nbond\ncds from an insured bank\n401(k)
Answer
Brief Explanations:
High-risk investments are characterized by a significant chance of loss in exchange for the potential for high returns.
- Stock in a start-up company: Start-ups have unproven business models and high failure rates, making equity in them highly volatile and risky.
- Bond: Generally considered lower risk than stocks, as they represent debt obligations with fixed interest payments.
- CDs from an insured bank: Certificates of Deposit are low-risk, especially when FDIC-insured, protecting the principal.
- 401(k): This is a retirement savings vehicle that contains various assets; while it can hold risky assets, the account type itself is not defined as a high-risk investment.
Answer:
stock in a start-up company