Which of the following best describes what investors in shares seek compensation for?
A) The loss of interest on a building society account plus the dividend yield on shares
B) Inflation and risk only
C) The risk- free rate of return plus a risk premium plus a premium for inflation
D) Sacrifice of immediate use of cash otherwise available for consumption, inflation and risk

Question

Quizplus · Accepted Answer

Investors in shares seek compensation for sacrificing the immediate use of cash otherwise available for consumption, as well as for inflation and risk. The potential for higher returns comes at the cost of giving up the option to use that money for other purposes in the short term. In addition, investing in shares is inherently risky, as the value of shares can fluctuate significantly depending on market conditions and other factors.

Which of the Following Best Describes What Investors in Shares