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)

Question

Responses

higher returns and lower liquidity than other investments
higher returns and lower liquidity than other investments

higher returns and higher liquidity than other investments
higher returns and higher liquidity than other investments

lower returns and lower liquidity than other investments
lower returns and lower liquidity than other investments

lower returns and higher liquidity than other investments

Answer 1

The ideal risky investment would offer higher returns and lower liquidity than other investments.

This is because investors typically seek higher returns as compensation for taking on the additional risk, while lower liquidity can be a characteristic of riskier investments, which may not be as easily sold or converted to cash.