Which of the Following Is a Disadvantage of Strongly Relying

question 7

Multiple Choice

Which of the following is a disadvantage of strongly relying on market timing?

• A)It requires the investor to make frequent trades.
• B)It has steady but very low returns because the investments are low risk.
• C)It requires huge, long term-investments on a single company, thus accentuating the risk.
• D)It is very time consuming and takes a very long time to get the returns.

---

Definitions:

Operating

Pertains to the regular, ongoing activities of a business that are involved in the production or sale of goods and services.

GAAP

Generally Accepted Accounting Principles; a framework of accounting standards, rules and procedures defined by the professional accounting industry, used to compile financial statements.

FASB

The Financial Accounting Standards Board, an organization that establishes financial accounting and reporting standards in the United States.

Financial Accounting

The field of accounting focused on the summary, analysis, and reporting of financial transactions pertaining to a business, leading to the creation of financial statements.