Lester McCann wants to invest but is worried about risk.In particular,he is worried that the money he invests today will not buy as much ten years from now.What type of risk concerns Lester?
A)Inflation
B)Interest rate risk
C)Business failure
D)Market
E)Global investment

Question

Quizplus · Accepted Answer

Lester's concern about the money invested today not being able to buy as much ten years from now suggests an inflation risk. Inflation refers to the general rise in the prices of goods and services over time, meaning that the purchasing power of money decreases. Thus, Lester needs to take inflation into account when making investment decisions to ensure that the returns on the investment can outpace the inflation rate.

Lester McCann Wants to Invest but Is Worried About Risk