The option A is correct.
Stock in a start-up company is an example of high-risk investment.
Further Explanation:
High-risk investment is a type of investment that has a high risk and high return. The investment may grow beyond the expectation, the investor will earn a huge profit. The high-risk investment may fall beyond the expectation, the investor will incur a huge loss.
Justification for the correct and incorrect answer:
A.
Stock in a startup company: This option is correct.
The startup company does not have a fixed share price. If the company may grow, the share price goes up. If the company may not grow, the share price goes down. This is a type of high-risk investment.
B.
Bond: This option is incorrect.
The bond pays a fixed interest on the investment. As there is no risk, this is not a high-risk investment. Bond is a risk less investment.
C.
CDs from an insured bank: This option is incorrect.
The full of from of CDs is a certificate deposit. As this investment is insured by the bank, there is no risk. This is the incorrect option.
D.
401k plan: This option is incorrect.
401k plan is a type of retirement account that has been opened by the employers. This does not have any type of risk associated with it.
Learn more:
1. Learn more about retirement
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2. Learn more about life insurance
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3. Learn more about negotiating the plan
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Answer details:
Grade: Middle School
Subject: Accounting
Chapter: Investment
Keywords:
high-risk investment, 401k plan, stock, company, startup, high risk, expectation, may grow, bond, CDs from an insured bank, type of investment.
