Common stock investments are most vulnerable to ____ risk.
A)marketability
B)market volatility
C)liquidity
D)inflation

Question

Quizplus · Accepted Answer

Market volatility refers to the level of fluctuations or changes in the overall stock market or in the price of an individual stock. Common stocks are exposed to market volatility because their price can rise and fall based on the performance of the company and external factors such as economic conditions, political events, and industry trends. This makes common stock investments vulnerable to market risks, especially as they are considered long-term investments and are subject to market fluctuations over time. Marketability, liquidity, and inflation risks can also affect common stocks, but to a lesser extent compared to market volatility.

Common Stock Investments Are Most Vulnerable to ____ Risk