For an investor who wants to speculate, which of the following investments would be appropriate?
A)red-chip stocks
B)options
C)utility stocks
D)corporate bonds
E)preferred stock issues

Question

Quizplus · Accepted Answer

Options are the most appropriate investment for speculation because they provide the opportunity to make significant gains with a smaller investment. However, options also have a high risk, and the investor must be knowledgeable about options trading before investing. Red-chip stocks, utility stocks, corporate bonds, and preferred stock issues are all investments that are generally considered more appropriate for investors who prioritize capital preservation and steady income over high-risk speculative gains.

For an Investor Who Wants to Speculate, Which of the Following