Which of the following is a key question to consider when making investments in securities?

• A. What is the expected return on the investment?
• B. What is the color of the company's logo?
• C. How many employees does the company have?
• D. What is the company's office location?

Answer: (A)

Verified step by step guidance

1. Understand the context of the question: When making investments in securities, the primary focus is on financial performance and potential returns, not on non-financial aspects like logo color, employee count, or office location.
2. Recognize that the expected return on investment is a fundamental concept in financial accounting and investment decision-making. It represents the profit or loss anticipated from an investment over a specific period.
3. Evaluate why the expected return is critical: It helps investors assess the risk and reward associated with the investment, guiding them in making informed decisions.
4. Eliminate irrelevant options: The color of the company's logo, the number of employees, and the office location do not directly impact the financial performance or the return on investment.
5. Conclude that the key question to consider when making investments in securities is: 'What is the expected return on the investment?' This aligns with the goal of maximizing financial gains while managing risks.