Your grandmother calls you for advice on where to invest $3000 she received from selling an antique piece of furniture. She knows you have taken business classes, so she wants you to guide her toward an investment that will help maintain the value of her money. You know that your grandmother needs an investment for capital preservation, so what do you tell her is the best option?

Question

Quizplus · Accepted Answer

Investing in a guaranteed investment certificate (GIC) is a low-risk investment option that is ideal for capital preservation. With a GIC, your grandmother will receive a fixed rate of return that is guaranteed by the bank or financial institution. This means that she will not be exposed to any market risk and will receive her initial investment plus interest at the maturity date. Though the returns on a GIC are not as high as other investment options, it is a safe and reliable way to preserve her capital.

Your Grandmother Calls You for Advice on Where to Invest