An investment
A) must have risk.
B) has an expected return at the forecasted inflation rate.
C) involves the sacrifice of present dollars for future dollars.
D) must involve the purchase of a real asset.

Question

Quizplus · Accepted Answer

An investment involves sacrificing present dollars for future dollars, which means investors are delaying consumption for the possibility of greater future rewards. Risk may or may not be present in an investment, and it is not necessary for an investment to involve the purchase of a real asset. The expected return may or may not match the forecasted inflation rate.

An Investment