For an investor, what are the three key characteristics of a potential investment?

In evaluating a potential investment, the key characteristics fundamentally revolve around how the investment aligns with the investor's objectives and risk tolerance. The correct answer highlights safety, liquidity, and yield as essential factors.

Safety refers to the degree of risk associated with the investment. An investor seeks to protect their principal amount from loss, thereby prioritizing investments that offer a measure of security, especially in unstable market conditions.

Liquidity is vital as it determines how quickly an investor can convert the investment into cash without significantly affecting its price. This is particularly important for investors who may need quick access to funds or who may wish to take advantage of other investment opportunities that arise unexpectedly.

Yield represents the income generated from the investment, usually expressed as a percentage of the investment's cost. Investors generally seek a satisfactory yield that compensates them for the risks they undertake. It influences the decision on whether the investment will meet the expected return on investment.

Understanding these three characteristics allows investors to make informed decisions that align with their investment strategy and financial goals. Notably, while characteristics like growth, stability, risk, security, dividends, and value are also important, they are not as universally pivotal as safety, liquidity, and yield, which directly impact an investment's performance in these areas.