Final answer:
Short-term investments generally last less than a year and can include various assets, such as savings accounts and CDs. They offer different levels of risk and liquidity, with some options like stocks being more volatile. Investors must weigh their tolerance for risk and their investment horizon when selecting short-term investments.
Step-by-step explanation:
Some characteristics of short-term investments include:
- a. They usually last for less than a year.
- b. They are considered low risk.
- c. They typically include both stocks and bonds.
- d. They typically help investors save for retirement.
- e. They can include savings accounts and CDs (Certificates of Deposit).
Short-term investments are designed to be held for a year or less and can be readily converted to cash, such as money market funds, short-term bonds, or savings accounts. However, not all short-term investments are low risk; some, like stocks, can be quite volatile. For retirees or those nearing retirement, investments with lower risk and more stability, such as savings accounts and CDs, are preferable.
Alternatively, young investors who can tolerate more risk may seek higher returns through stocks or mutual funds in the long run. It's important for every investor to consider their own risk tolerance and investment timeline when choosing how to allocate their funds.
Therefore the answer is e. They can include savings accounts and CDs.