An Investor with a Strong Appetite for Risk Should Purchase

question 104

Multiple Choice

An investor with a strong appetite for risk should purchase a(n) ________.

• A)cyclical stock
• B)blue chip stock
• C)growth stock
• D)income stock

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Definitions:

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.

Money Market Accounts

Savings accounts that typically offer higher interest rates, with the balance usually accessible through checks or electronic transfers.

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts payable and inventories.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value.