Question

Moving all the cash into a very low-risk investment most likely means expecting much higher earnings. What is the most likely reason for this decision?

1) Being very young
2) Having few family responsibilities
3) Being retired or close to retirement
4) Cannot be determined

Answer 1

Investing all cash into a low-risk investment likely means expecting higher earnings, and this decision is commonly made by individuals who are retired or close to retirement.

Step-by-step explanation:

Investing all cash into a very low-risk investment most likely means expecting much higher earnings. This decision is most likely made by individuals who are retired or close to retirement. As people near retirement age, they often prioritize reduced risk and certainty about retirement income, and low-risk investments provide a greater level of security. Stocks, for example, can be very risky in the short term, but over several decades, they typically offer much higher returns compared to bonds or bank accounts.