Question

Which type of investment is generally better for the long term and which type of investment is generally better for the short term?

A. Equity investments are better for the long term and interest investments are better for the short term.
B. Equity investments are better for the short term and interest investments are better for the long term.
C. Both equity and interest investments are good for both the long term and the short term.
D. Neither equity nor interest investments are good for either the long term or the short term.

Answer 1

Equity investments are generally better for the long term, while interest investments are better for the short term.

Step-by-step explanation:

In general, equity investments are better for the long term and interest investments are better for the short term.

Equity investments, such as stocks, have the potential to provide higher returns over a long period of time, but they also come with higher risks in the short term. The stock market can be volatile and the value of stocks can fluctuate greatly in the short run.

On the other hand, interest investments, such as bonds or bank accounts, typically provide lower returns but with lower risks. They are more stable and predictable in the short term, making them better suited for short-term goals or preserving capital.