Final answer:
The stock market investment has the greatest risk among the given options. It also has potentially higher returns to compensate for this risk. High risk does not inherently mean low returns; it often offers the potential for higher returns.
Step-by-step explanation:
Among the options provided for investing inheritance money - a savings account, government bonds, the stock market, and a Certificate of deposit (CD) - the stock market investment carries the greatest risk. This is because the stock market is subject to volatility due to various factors such as economic changes, market sentiment, and company performance.
Historically, the stock market has offered a higher average return over time compared to bonds or savings accounts. The potential for higher returns is meant to compensate for the higher level of risk. On the other hand, savings accounts and CDs usually offer lower returns but are considered low-risk, while government bonds carry a moderate level of risk with relatively stable returns.
It is not necessarily true that a high-risk investment will have low returns. In fact, part of the reason investors are willing to take on higher risks is the possibility of achieving higher returns. Each investment type serves different investor needs based on their risk tolerance and investment goals.