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Select the correct answer.

Which statement comparing short- and long-term investments is true?

A. Both offer a high degree of liquidity.
B. Both have a minimum maturity period of five years.
C. Both include stocks, bonds, and cash.
D. Both have the same risk level and potential of returns.



Answer :

GinnyAnswer

Final answer:

Short-term investments offer higher liquidity and lower risks compared to long-term investments.


Explanation:

Short-term investments typically have a lower maturity period, providing quicker access to funds compared to long-term investments which require a longer commitment period.

Short-term investments usually offer higher liquidity since they can be easily converted to cash, while long-term investments may have restrictions on accessing funds before maturity.

Risks and potential returns associated with short-term investments are generally lower compared to long-term investments due to the shorter time horizon.


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