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.
high risk, high return, and poor liquidity.

Answer 1

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

Individual stocks can be very volatile (high risk), but they also have the potential for substantial returns. Additionally, stocks generally have good liquidity, meaning they can be easily bought and sold in the market.