Making a loan is generally _______ than buying stock, and it earns a _______ return.
A) less risky; lower
B) less risky; higher
C) riskier; lower
D) riskier; higher

Question

Quizplus · Accepted Answer

Making a loan is generally considered less risky than buying stock because the loan contract typically includes fixed terms for repayment and interest rates, while the stock market is subject to fluctuations that could result in loss of investment. However, because of this lower level of risk, loans typically earn a lower return than investing in stocks.

Making a Loan Is Generally _______ Than Buying Stock, and It