Which is an example of a high-risk investment? stock in a start-up company
CDs from an insured bank


Answer 1

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:


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.  


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.  


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.  


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

2. Learn more about life insurance

3. Learn more about negotiating the plan

Answer details:

Grade: Middle School

Subject: Accounting

Chapter: Investment


high-risk investment, 401k plan, stock,  company, startup, high risk, expectation, may grow, bond, CDs from an insured bank, type of investment.  

Answer 2
Answer: The answer is A stock in a start-up company

Related Questions


How can one distinguish between an organizational weakness and a threat to the organization?



The difference among the threat and the weakness is that the threat is a danger which is an external and the weakness is internal vulnerability


In business, threat is an other company ability to impact negatively the ability of the company in order to achieve the objectives or goals.

For example, the another company or the firm have just released or launched the new product and it performs better as well as good and also costs or the expense is less than the product does, which make it difficult for the company  or the firm to accomplish or achieve the desired sales targets.

Example of the weakness, it is within the company, that the person or the individual will have little research and the development funds available , in order to upgrade the product will be difficult to match the competitor new product.

It could exist in other entities as well, just as the person can harbor the threats


Premier Co. produces park equipment and is currently producing 10,000 park benches annually. A supplier has offered to produce the bench for Premier Co. for $500 per bench. Premier Co. incurs unit-level costs of $490 per unit. Premier also spends $50,000 on product design each year and incurs $100,000 of facility-level costs. Calculate the avoidable production cost for Premier Co. to produce 1 bench.





If Premier Co. incurs a unit-level cost of $490 per unit

Product design cost = $50000

Facility-level cost = $100000

No of units produced annually = 10000

Product design cost/unit = $50000/10000 = $5

Facility-level cost/unit = $100000/10000 = $10

Hence total production cost per unit = $490 + $5 + $10 = $505

However, the supplier is willing to produce the bench at $500 per unit

Thus avoidable production cost for 1 bench = $505 - $500 = $5


On April 31, 2018, Elkhorn Associates borrowed $10 million cash from Colonial Bank and issued a 5-month, noninterest-bearing note, priced to yield an effective interest rate of 10%. The stated discount rate on this loan is: a. More than the effective interest rate.
b. Less than the effective interest rate.
c. Equal to the effective interest rate.
d. Unrelated to the effective interest rate.



b. Less than the effective interest rate


The stated discount rate on this loan is Less than the effective interest rate

As the note is noninterest-bearing note, the stated discount rate on this loan is less than the effective interest rate.


In a lean system, work-in-process inventory is reduced to reveal production problems, which can then be a. addressed.
b. ignored because it has little effect on the availability of finished goods inventory.
c. increased to prevent work stoppages due to production problems and smooth overall production.
d. eliminated entirely.





Lean system, also called lean manufacturing, is a continuous elimination of waste from all process, using the ideas of all employees, especially those at the lower levels of the organization.

Process of Inventory Tracking:

-Sensors. to track real time movements and location of raw materials, work in progress and finished goods, and high value tooling.

-Analytics. to optimize inventory on hand and automatically signal for replenishment.


-This process freeing up employees for more valuable tasks.

-Inventory accuracy.

-Cost cutting.

-Improved data visibility.

-Preventing stock issues.

-Better customer service.

Random Questions