Donnell wants to invest some money that he just inherited. He found that his bank offers a savings account paying a guaranteed .3% rate of return. However, he would like to earn a higher return. Donnell should keep in mind that to earn a higher return on his money he
A) will have to invest overseas.
B) should invest in a business that has a very stable and predictable rate of return.
C) will probably have to accept a higher level of risk.
D) will probably have to engage in illegal activities.

Question

Quizplus · Accepted Answer

Investing in a savings account (certificate of deposit) at a bank entails very little risk, but earns a relatively small return. Business opportunities that offer the potential for high profits are often associated with a high level of risk. An investor must weigh the potential profit of an investment with its risk.

Donnell Wants to Invest Some Money That He Just Inherited