Which of the following correctly orders the investments from LOWER risk to HIGHER risk?
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The correct answer is - Treasury bond − Diversified mutual fund - Stocks.
An investment is an asset or item that is purchased with the hope that it will generate income or will appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth.
All investments involve some degree of risk. In finance, risk refers to the degree of uncertainty or potential financial loss that could happen in an investment decision. In general, as investment risks rise, investors seek higher returns to compensate themselves for taking such risks.
Usually, a portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds would be considered to be the highest risk portfolio.
An investment is an asset or item that is purchased with the hope that it will generate income or will appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth.
All investments involve some degree of risk. In finance, risk refers to the degree of uncertainty or potential financial loss that could happen in an investment decision. In general, as investment risks rise, investors seek higher returns to compensate themselves for taking such risks.
Usually, a portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds would be considered to be the highest risk portfolio.
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In high risk investment, high chance of loss of underperformance or capital occur. Low risk investment protects against the chance of any kind of loss and also it ensure that neither of the potential losses will be devastating.
The correct answer is Treasury bond- Diversified mutual fund- Stock.
Because relying on personal resources has more risk than relying on public resources of producers.
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