Which of the Following Statements Is True with Regard to the Risk

question 90

Multiple Choice

Which of the following statements is true with regard to the risk of investments?

• A) There is very little risk in an IPO since returns often exceed 20% in the first day.
• B) Mutual funds containing mostly large stocks are more risky than mutual funds containing smaller stocks.
• C) If you prefer less risk, purchase a bond issued by a successful and established firm.
• D) There is little risk in purchasing land as an investment since the value of land always appreciates over time.

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Definitions:

Mud Statues

Sculptures made from mud, often created as part of traditional crafts or for ceremonial purposes.

Variable Cost

Costs that vary in direct proportion to changes in levels of production or output.

Loan

A sum of money borrowed that is expected to be paid back with interest over a specified period.

Total Cost

The sum of all costs associated with the production of goods or services, including fixed and variable costs.