Final answer:
Speculation is accurately described as high-risk investment with uncertain returns and future value, which is true (A). It involves the potential for significant gains through market fluctuations but comes with a high volatility level, making it suitable for investors with a higher risk tolerance and a long-term investment horizon.
Step-by-step explanation:
The statement that speculation refers to high-risk investments which offer highly uncertain returns and future value is A) True. Speculation is indeed the practice of investing in risky financial opportunities with the expectation of achieving a significant payoff due to market fluctuations over a short period. These speculative investments are associated with high volatility, and their returns are highly uncertain, which makes them high-risk in nature.
Looking at the context of investment portfolio management, individuals should consider their life stage and risk tolerance when making investment decisions. Younger investors, with a longer time horizon, may opt for stocks because they typically offer higher returns over an extended period despite their short-term risk. On the other hand, those nearing retirement usually prefer low-risk investments for more certainty around their retirement income. Mutual funds are also a popular choice for individuals hoping to reduce transaction costs while still participating in the stock market's long-term growth potential.