Which factor is primarily concerned with the protection of an investor's capital?

The correct answer is focused on the safety of investment, which is fundamentally concerned with protecting an investor's capital. When discussing investments, safety refers to the ability to preserve the principal amount invested, minimizing the risk of loss. This factor is essential for investors, especially those who are risk-averse or nearing their financial goals, as they aim to safeguard their assets against potential market volatility or economic downturns.

Investments that emphasize safety typically include government bonds, high-quality corporate bonds, and other low-risk securities. These options are designed to ensure that the investor's principal amount remains intact, often offering lower returns in exchange for reduced risk. The objective is to provide peace of mind that the invested capital is secure, allowing the investor to focus on achieving their financial objectives without undue stress from potential losses.

Other options, while relevant to investment decisions, do not focus primarily on the protection of capital. For instance, liquidity refers to how easily an investment can be converted to cash without significant loss of value, management pertains to how an investment is supervised and maintained, and appreciation relates to the increase in value of an asset over time. While these factors are important in their own right, they do not address capital protection as directly as safety does.