Decide whether the following statement makes sense​ (or is clearly​ true) or does not make sense​ (or is clearly​ false). Explain your reasoning.I bought a fund advertised on the web that says it uses a secret investment strategy to get an annual return twice that of​ stocks, with no risk at all.Choose the correct answer below.A.The statement does make sense because this secret investing strategy must be a new financial planning strategy that does not incorporate the three traditional investment​ considerations: liquidity,​ risk, and return.B.The statement does not make sense because investing in stocks is​ low-risk to get high​ returns, thus getting higher returns than stocks with this secret strategy must mean the fund advertised on the web is​ low-risk, not no risk.C.The statement does make sense because the strategy indicates that the return is a predictable​ amount, thus the fund advertised on the web is a​ no-risk investment.D.The statement does not make sense because investing in stocks is​ high-risk to get high​ returns, thus getting higher returns than stocks with this secret strategy must mean the fund advertised on the web is​ high-risk, not no risk.

Question
Asked Apr 14, 2019
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Decide whether the following statement makes sense​ (or is clearly​ true) or does not make sense​ (or is clearly​ false). Explain your reasoning.

I bought a fund advertised on the web that says it uses a secret investment strategy to get an annual return twice that of​ stocks, with no risk at all.
Choose the correct answer below.

A.
The statement does make sense because this secret investing strategy must be a new financial planning strategy that does not incorporate the three traditional investment​ considerations: liquidity,​ risk, and return.

B.
The statement does not make sense because investing in stocks is​ low-risk to get high​ returns, thus getting higher returns than stocks with this secret strategy must mean the fund advertised on the web is​ low-risk, not no risk.

C.
The statement does make sense because the strategy indicates that the return is a predictable​ amount, thus the fund advertised on the web is a​ no-risk investment.

D.
The statement does not make sense because investing in stocks is​ high-risk to get high​ returns, thus getting higher returns than stocks with this secret strategy must mean the fund advertised on the web is​ high-risk, not no risk.

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Expert Answer

Step 1

The correct answer is “Statement D”.

Step 2

Justification:

Statement A: The strategy comprise of risk, liquidity and return. Hence this statement is incorrect.

Statement B: Investing in stocks is a high-risk to get high returns and not low-risk to get high-returns. Hence this statement is incorrect.

Statement C: The strategy does not involve any return. Hence this statement is incorrect.

Statemen...

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