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Which statement is generally true of an investment that is highly volatile but has superior, long-term real rates of return?
It has low liquidity because selling would often require selling at a loss.
It has high liquidity because liquidity follows the real rate of return.
Its nominal rates of return are lower than the real rates of return.
The volatility makes it a high risk investment despite the good long-term return

Answer :

meerkat18
Which statement is generally true of an investment that is highly volatile but has superior, long-term real rates of return?

It has low liquidity because selling would often require selling at a loss.

High volatile investments are investments that always fluctuates in the market. It can generate you very high income or very low income. It has low liquidity because when you sell it right away, you tend to sell at a loss.

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