Multiple choice

The biggest advantage of investment in gold is

  1. high returns

  2. high appreciation in value

  3. low purchase price

  4. hedge against inflation

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Gold has traditionally served as a hedge against inflation because its value tends to rise when the cost of living increases. Unlike paper currency, gold maintains purchasing power over long periods because its supply is relatively fixed. While gold can provide appreciation during economic uncertainty, its primary advantage is inflation protection rather than guaranteed high returns or low purchase price (gold prices can be volatile and entry costs vary).