The risk associated with some investments may fluctuate because of periods of economic expansion followed by periods of recession.

Question

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Economic cycles can affect the performance of different investment categories or industries, leading to fluctuations in risk. During periods of economic expansion, investors may feel more confident and willing to take risks, driving up prices and potentially increasing the risk associated with certain investments. Conversely, during periods of recession or economic contraction, investors may be more cautious and risk-averse, leading to lower prices and potentially decreasing risk in certain investments.

The Risk Associated with Some Investments May Fluctuate Because of Periods