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?

Question

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

Answer 1

The ideal risky investment for savvy investors would offer higher returns and higher liquidity than other investments.

This combination provides the potential for greater financial gain while still allowing investors the flexibility to access their funds more easily if needed. High liquidity is particularly appealing because it allows investors to sell their investments quickly without significant price fluctuations. Therefore, the best choice from the options provided is:

higher returns and higher liquidity than other investments.