Business High School

Which statement is true?

A.
Taxes are higher on short-term investments than long-term investments.
B.
Short-term investments are less prone to price volatility than long-term investments.
C.
Short-term investments require greater diversification than long-term investments.
D.
Short-term investments incur lower transaction fees than long-term investments.
E.
Short-term investments have a higher inflationary risk than long-term investments.

Answers

Answer 1

Answer:

c

Explanation:

plato

Answer 2

The actual statement is that taxes are higher on short-term than long-term investments. Thus the correct option is C.

What is Investment?

A purchase made for the purpose of earning money or appreciating in value is known as an investment. The investor will make a long-term profit from their investment in any asset or object.

When short-term investments are made for shorter periods of time with lower returns, they are subject to higher tax rates since they are taxed at the investor's regular income tax rate.

Long-term investments are taxable at an amount that is often lower than ordinary income tax rates since they are subject to long-term capital gains taxation.

The investor must retain the property for more than a year in order to be eligible for this lower rate, which is understood to represent a higher investment with higher risk and higher return.

Therefore, option C is appropriate.

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