Individual stocks are popular investments that are easy to sell and have the potential to earn significant income for investors. However, they fluctuate wildly in price, increasing the likelihood that an investment fails. What is the risk, return, and liquidity on this type of investment?(1 point)

Question

Responses

low risk, low return, and poor liquidity.
low risk, low return, and poor liquidity.

high risk, high return, and poor liquidity.
high risk, high return, and poor liquidity.

high risk, high return, and good liquidity.
high risk, high return, and good liquidity.

low risk, high return, and good liquidity.

Answer 1

The correct response is:

high risk, high return, and good liquidity.

Individual stocks can experience significant price fluctuations, indicating high risk. However, they also have the potential for high returns, especially if the company performs well. Liquidity is generally considered good for individual stocks, as they can be easily bought and sold on stock exchanges.