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

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

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

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

high risk, high return, and poor liquidity.

Answer 1

The correct response is: high risk, high return, and good liquidity.

Individual stocks are indeed considered a high-risk investment due to their price volatility, but they also offer the potential for high returns. Additionally, stocks are generally liquid, meaning they can be easily bought or sold in the market.