Question

Statement - I: Capital market instruments are considered riskier both with respect to returns and principal repayment.

Statement - II: Capital market investment generally yields a higher return for investors.

Options

• Statement - I is true and II is false.

• Statement - II is true and I is false

• Both the statements are true.

• Both the statements are false.

Answer 1

Both the statements are true.

Explanation:

Statement I is correct because capital market instruments are subject to market moves and interest rate changes, making them hazardous in terms of returns and principal repayment. Statement II is also correct because capital market investments normally provide bigger returns but are riskier.