Investors are rewarded for assuming more risk. U.S. Treasury certificates, the safest of all investments, offer quite stingy interest rates whereas more speculative investments tantalize investors with much higher returns. Uninformed investors often risk their life savings in investments that boast historical high returns without considering the risk. Consider your own risk tolerance, and rate yourself on a scale of 1 to 10 with 1 being very low risk tolerance and 10 being very high risk tolerance. How much risk are you willing to take to earn a higher return? What factors influence your decision? Can an investor gauge the risk of a potential investment? If so, how?

Answer rating: 100% (QA)

My Risk Tolerance 7 I am willing to take a moderate level of ri... View the full answer