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Investments that have a very high risk tend to pay out a lot more and those that have a low risk have reliable low pay-outs. For example:
- A Certificate ofDeposit (CD) or a savings account is considered low risk, low return. If you put your money in one, there will be a low rate of return (interest paid to you), but you will gain money on the investment. It just won't be a lot.
- Stocks are usually considered high risk high return because you spend a lot of moneywithout knowing the payout, but if everything goes through you will get a high return (payout)
- Broken down, you might say that new company has stock priced at $1 per share; if you buy 1 share at $1 and the value increases to $25 over time, you would only make $24. If you take the same example, but you buy 1000 shares (spending $999 more) and the stock increases to $25, you would make $25,000. A much bigger risk (because the company could have gone bankrupt and you could have lost it all), but worth it to potentially make $24,775 more.
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The practice of making high-risk investments in hopes of a huge return?
car
How is the potential rate of return on investments related to the level of risk?
Higher risk investments have a higher potential return.
How can you maintain a balance between high risk and low risk investments?
Diversifying your investments will help maintain a balance between high risk and low risk investments.
High return on an investment is associated with?
higher risk. The higher the potential return, the higher the potential risk because there is a greater chance of losing money. High returns often come from investments with higher volatility and uncertainty, such as stocks or speculative assets, which carry greater risks compared to more conservative investments like bonds or savings accounts.
How can you maintain a balance between high-risk and low-risk investments?
"By diversifying your investments" is the way among the choices given in the question that you can maintain a balance between high-risk and low-risk investments.
How can you maintain a balance between high risk and low risk investment?
Diversifying your investments will help maintain a balance between high risk and low risk investments.
What are high risk investments?
hey
What are some low-risk equity investments?
low risk investments offer a good to high rate of return with very little change of loosing money. Real estate, other real property, and mutual funds are examples.
What does speculation mean to economist?
Speculation to an economist means making high-risk investments with borrowed money
What is one of the risk of being a stockholder?
Stockolders are not guaranteed a return on their investments.
What does it mean to be diversified in your investments?
Spreading out your risk by having different investments.
What is a forex indicator used for?
A forex indicator looks at the current climate for high-risk high-return investments. It provides insight for home builders on the current state of the market.
