Investors are often presented with risky investment opportunities. While high risk is typically avoided by savvy investors, which of the following would the ideal risky investment offer?(1 point)
Responses
lower returns and lower liquidity than other investments
lower returns and lower liquidity than other investments
higher returns and higher liquidity than other investments
higher returns and higher liquidity than other investments
higher returns and lower liquidity than other investments
higher returns and lower liquidity than other investments
lower returns and higher liquidity than other investments
The ideal risky investment offer would be: higher returns and lower liquidity than other investments.
The ideal risky investment offer would be: higher returns and higher liquidity than other investments.
To determine the ideal risky investment offer, we need to compare the options based on their returns and liquidity.
The first option states "lower returns and lower liquidity than other investments." This means that the investment would offer lower potential gains and would not be easily converted into cash. Savvy investors would typically avoid this option as it offers both lower returns and lower liquidity.
The second option states "higher returns and higher liquidity than other investments." This option presents a more attractive opportunity as it offers the potential for higher returns and the ability to easily convert the investment into cash. Savvy investors would be more inclined to consider this option.
The third option states "higher returns and lower liquidity than other investments." Although it offers the potential for higher returns, the lower liquidity aspect could be a concern. Lower liquidity means that it may be more difficult to convert the investment into cash when desired. This option carries more risk and may not be as appealing to savvy investors.
The fourth option states "lower returns and higher liquidity than other investments." This option also presents a concern for savvy investors. While it offers higher liquidity, which means the investment can be easily converted into cash, the lower returns aspect is not attractive.
Therefore, the ideal risky investment offer would be the one that offers higher returns and higher liquidity than other investments - as mentioned in the second option.