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Which of these is described as an investment in a financial market?

a. 30 shares of Tesla stock
b. A famous painting bought from a gallery
c. Money in a high-interest bank account
d. A Super Bowl ticket that you resell for a profit

1 Answer

6 votes

Final answer:

An investment in the financial market is best described by option a, the purchase of 30 shares of Tesla stock. Stocks can offer considerable returns through dividends and capital gains but come with varying levels of risk.

Step-by-step explanation:

The investment in a financial market can be described by option a, which is 30 shares of Tesla stock. Stocks are tradable financial assets that represent ownership in a company. When you purchase stock, you're buying a piece of that company and becoming a shareholder. Shareholders can potentially earn money through dividends, which are portions of the company's profit paid out to shareholders, or through capital gains, which occur when you sell the stock for more than the purchase price. Stocks can offer higher average returns over time when compared to bonds or a savings account, but they also come with greater risks. The level of risk does not automatically mean that an investment will have a low return; a high-risk investment has the potential for high returns as well as for losses.

Examples presented such as Freda's and Frank's house purchases fall under real estate investments, which can be sold for profit but do not fall under typical financial market investments. The Super Bowl ticket resale and the famous painting are more closely related to items that could be considered as collectibles or non-financial investments.

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User LuckySlevin
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