A safe dollar is always worth less than a risky dollar because the rate of return on a safe investment is generally low and the rate of return on a risky investment is generally high.

Question

Quizplus · Accepted Answer

This statement is incorrect. In reality, a safe dollar is worth more than a risky dollar because investors are willing to pay a premium for safety and predictability. Safe investments such as government bonds, savings accounts, and CDs typically offer a lower rate of return but are considered less risky. Risky investments such as stocks, options, and high-yield bonds have the potential for higher returns but are also associated with higher risk and volatility.

A Safe Dollar Is Always Worth Less Than a Risky