Investors should be willing to invest in riskier investments only:

Question

Quizplus · Accepted Answer

Investors should only be willing to invest in riskier investments if the expected return is adequate for the level of risk. This means that investors must assess the risk-reward tradeoff and determine whether the potential return justifies the potential risk. It is important to note that this assessment should be made on an individual basis, taking into account one's personal financial situation, objectives, and risk tolerance. Investing in riskier investments solely due to a short-term time horizon or the absence of safe alternatives is not a sound investment strategy. Additionally, investing purely for speculation purposes is not recommended for the average investor, who should instead focus on building a diversified portfolio with appropriate risk exposure.

Investors Should Be Willing to Invest in Riskier Investments Only