I believe the answer is: the value of the investment may be hard to predict
a volatile investment refers to the type of investment which market value tend to be fluctuated due to several factors, such as a change in stock prices, market demand over the investment product, or mismanagement.
Because of there are too many factors that affect it, the value of investment would constantly change in a short term and make it really hard to predict.
If an investment is considered “volatile,” it means a small change in any related factors of the investment, the investment reacts very quickly.
Further Explanation:
Investment:
Investment refers to the amount of money fixed in the market in any instrument which provides a return. The investor invests in those types of investment, which provides the highest return in a limited time period. If the investors put aside the money in his pocket, it does not get any return or increases the value of money. But if the investor invests in the market, it will add the money in principal money.
Volatile means when there is a small change in any factor of investment, it reacts very quickly. It means the value of an investment is changed frequently. The investment is also considered as a riskier investment. As the risk in the investment is high, the return on this type of investment is too high. The risk is low; the investment return is also low. The risk and the return on the investment are directly related to each other.
If there is a little change in the factors of the market, there is a massive change in the value of an investment.
Learn more:
1. Learn more about investment
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2. Learn more about stock portfolio risk
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3. Learn more about risk-free return
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Answer details:
Grade: Middle School
Subject: Business
Chapter: Investment
Keywords: investment is considered, volatile, the small change, any related factors, reacts very quickly, investor, put aside, changed frequently, directly related, each other.
