An individual is looking for an investment that reduces the chances of losing some or all of the investment and that is easily convertible to cash. Explain the type of investment that the individual should consider in economic terms. (1 point)

Question

An individual is looking for an investment that reduces the chances of losing some or all of the investment and that is easily convertible to cash. Explain the type of investment that the individual should consider in economic terms. (1 point)

The individual should consider an investment that is low risk but have a high
• return. This type of investment has the best chance for a large return and is easily convertible to cash.

• The individual should consider an investment that has low return and high liquidity. This type of investment is low risk and can be convertible to cash.

The individual should consider an investment that has high return and high
O liquidity because the investment has the lowest risk and the best chance for a
large return.

The individual should consider an investment that is illiquid and high risk. This
• type of investment has a small probability of losing some or all of the investment.

Answer 1

Therefore, the individual should consider investing in high return and high liquidity assets, as they offer the best balance between risk and return while still being easily convertible to cash. Examples of such investments could include blue-chip stocks, bond index funds, or money market funds. These investments provide the potential for significant returns while also allowing for quick and easy access to cash if needed.