select the correct answer. which statement is true? a. taxes are higher on short - term investments than…

select the correct answer. which statement is true? a. taxes are higher on short - term investments than long - term investments. b. short - term investments are less prone to price volatility than long - term investments. c. short - term investments require greater diversification than long - term investments. d. short - term investments incur lower transaction fees than long - term investments. e. short - term investments have a higher inflationary risk than long - term investments.

select the correct answer. which statement is true? a. taxes are higher on short - term investments than long - term investments. b. short - term investments are less prone to price volatility than long - term investments. c. short - term investments require greater diversification than long - term investments. d. short - term investments incur lower transaction fees than long - term investments. e. short - term investments have a higher inflationary risk than long - term investments.

Answer

Brief Explanations:

Short - term capital gains are typically taxed at ordinary income tax rates, which can be higher than the lower long - term capital gains tax rates for investments held for more than a year. Short - term investments are more exposed to market fluctuations (higher price volatility), don't necessarily require greater diversification, transaction fees aren't inherently lower, and long - term investments have higher inflationary risk as inflation can erode value over a longer time horizon.

Answer:

A. Taxes are higher on short - term investments than long - term investments.