Question

Compared to a short-term investment, a long-term investment is generally considered to have similar returns. to be equally as risky. to have greater risk. to offer lower returns.

Answer 1

Answer: To have greater risk

Explanation:

Long term investments are considered to be riskier due to the increased exposure they will have to market conditions like inflation and interest rates.

An investment that will take longer to mature will run the risk of giving returns that will be eroded as inflation rises overtime which means the investor is getting less return per dollar. This risk is one reason why longer term investments are charged higher returns.

Answer 2

Answer:

To have greater risk.

Explanation: This is the correct answer on Edge 2020 ^-^ (I just recently completed the test).