Some Savings and Investment Choices Have the Potential for Higher

question 62

Multiple Choice

Some savings and investment choices have the potential for higher earnings.However,these may also be difficult to convert to cash when you need the funds.This problem refers to:

• A)inflation risk.
• B)interest rate risk.
• C)income risk.
• D)personal risk.
• E)liquidity risk.

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Definitions:

Overdue Accounts

Accounts receivable that have not been paid by the due date, often indicating a delay or default in payment by the debtor.

Contract

A legally binding agreement between two or more parties defining obligations and rights.

Equivalent Payments

Alternative payments that will result in the same future value at a later date.

Obligation

A duty or commitment to fulfil an act, usually as part of a contract or by law, such as the repayment of a loan.