5. What is a potential risk of using credit for consumption as opposed to investment? 1. Using credit for consumption always leads to financial success 2. Using credit for consumption strategy and cost-effective 3. Using credit for consumption can lead to unsustainable spending and high costs 4. Using credit for consumption guarantees a positive return on investment

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5. What is a potential risk of using credit for consumption as opposed to investment? 1. Using credit for consumption always leads to financial success 2. Using credit for consumption strategy and cost-effective 3. Using credit for consumption can lead to unsustainable spending and high costs 4. Using credit for consumption guarantees a positive return on investment

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The correct answer is **3. Using credit for consumption can lead to unsustainable spending and high costs.**Here's why:* **Consumption** refers to spending on goods and services that are used up relatively quickly, like food, clothing, or entertainment. Using credit for these items means you're paying interest on things that don't increase in value. This can lead to a cycle of debt if spending isn't carefully managed.* **Investment** refers to spending on assets that are expected to appreciate in value over time, like stocks, bonds, or real estate. While there are risks involved, investments have the potential to generate income and build wealth.The other options are incorrect:* Option 1 is false. Mismanaged credit can lead to significant financial problems.* Option 2 is false. Credit itself isn't a strategy, and its cost-effectiveness depends entirely on how it's used.* Option 4 is false. Consumption spending, by definition, doesn't generate a return on investment.

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