Muhammad is considering investing some of his hard-earned cash by opening a certificate of deposit. Muhammad is disappointed to learn that If he invests $500, he will likely only earn an additional $9 a year from today. So, he decides to invest his funds somewhere that will generate more income for him. Which of the following did Muhammad find unsatisfactory about the certificate of deposit?(1 point)
Responses
The risk of the investment was too high.
The risk of the investment was too high.
The liquidity of the investment was too high.
The liquidity of the investment was too high.
The return on his investment was too low.
The return on his investment was too low.
The liquidity of the investment was too low.
The return on his investment was too low.
The return on his investment was too low.
The correct answer is: The return on his investment was too low.
To determine this, Muhammad compared the earning potential of the certificate of deposit to his expectations. He found that by investing $500, he would only earn an additional $9 per year, which he considered unsatisfactory. This indicates that the return on his investment was too low, as it did not meet his desired level of income generation.