Which of the following statements about investment objectives is FALSE?

Study for the Variable Universal Life/Universal Life Plan (VUL/ULP) Exam. Prepare with flashcards and multiple choice questions, each question is accompanied by helpful hints and explanations. Ace your exam!

The statement that "investments in equities ensure high returns" is false because it overstates the reliability of equities as an investment vehicle. While equities generally have the potential for high returns over the long term due to the growth of companies, they also come with a significant level of risk and volatility. Returns are not guaranteed and can fluctuate widely based on market conditions, economic factors, and company performance. Therefore, while equities can yield high returns, it is inaccurate to claim that they ensure such outcomes, as there are no guarantees in investing.

Understanding this distinction is essential for investors, as it underscores the importance of assessing risk tolerance, investment goals, and the potential for loss when considering stock investments. Other options depict realistic motivations and outcomes for investment, providing a more accurate view of investment objectives. For example, investing for comfort, education, and improved living standards reflects the diverse reasons people engage in investment activities, acknowledging both the potential for growth and the necessity for income stability. Commodity investments can indeed provide varied income as well, affirming that not all asset classes are consistent in their returns.

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