When Comparing T-Bills and Stocks,a Risk-Averse Investor May Choose to Invest

question 35

Multiple Choice

When comparing T-bills and stocks,a risk-averse investor may choose to invest in T-bills although stocks give higher average returns because _____.

• A)investing in stocks involves a long term commitment
• B)investing in stocks involves a higher degree of risk
• C)stocks are less liquid than T-bills
• D)stocks cannot be bought and sold in a secondary market

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Definitions:

User-Defined

Refers to specific settings or customization options that a user can modify to meet their individual preferences or requirements.

Mutual Fund

An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, and other assets.

Financial Market

Platforms or systems where financial instruments like stocks, bonds, currencies, and derivatives are bought and sold.

Bonds

Fixed-income securities that represent a loan made by an investor to a borrower, typically used by corporations, municipalities, states, and governments to finance projects and operations.