Which of the following methods allows to get higher returns for EIA:
A. annual ratchet.
C. depends on market conditions.
D. none of the above.
The investment is done to get the return on the investment. There are various investment tools to choose from depending on their risk factors such as share market, debentures, bonds, etc.
Answer and Explanation:
Answer(C).depends on market conditions
Basically, the potential of the EIA to achieve returns that are considered great depends on market conditions. For instance, the stock market have the tendency to rise and fall and sometimes, the changes in the market condition are unprecedented. So, the market condition will determine the risk that can be related to the more returns as in the case of risk-averse investors and also the interest rate that is linked to the market index.
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Learn more about this topic:
from Finance 305: Risk ManagementChapter 3 / Lesson 3