Investments Basics: Risk, Return, Liquidity

Opportunity cost is best described as...

• The amount paid to access a specific market.

• A way to measure cost of manufactured goods.

• The cost (or benefit) of the road not chosen.

• The return of an investment.

Mark the statements that are TRUE:

• Return is the profit or yield of an investment.

• Markets with higher liquidity generally have higher levels of trade.

• Risk is the chance that the value of an asset will decrease.

• The past performance of an investment is a guarantee of its future returns.

Which of these is a completely risk free investment?

• Tesouro Direto (Brazilian treasury bonds)

• Poupança (Savings Account)

• Petrobras Stocks

• None of the above.

Mark the investment options that represent HIGH LIQUIDITY:

• Stocks

• Real Estate

• Savings Account

• Cars

As risk tolerance doesn't change, any given person will have the same investor profile throughout his entire life.

• The statement TRUE.

• The statement is FALSE.