Question

Relative to traditional investments, alternative investments are best characterized as having:

a) Lower returns and higher liquidity
b) Higher returns and higher risk
c) Higher returns and lower fees
d) Lower returns and lower volatility

Answer 1

Alternative investments are best characterized as having higher returns and higher risk compared to traditional investments.

Step-by-step explanation:

Relative to traditional investments, alternative investments are best characterized as having higher returns and higher risk. While traditional investments like stocks and bonds may offer lower risks and lower returns, alternative investments such as venture capital, private equity, and hedge funds generally have higher returns but also carry higher risks.