asked 103k views
3 votes
Which of the following is considered to be the riskiest investment?

a. government bonds
b. stocks
c. mutual funds
d. land

1 Answer

6 votes

Final answer:

Stocks are generally considered to be the riskiest investment compared to government bonds, mutual funds, and land due to their market volatility and potential for significant fluctuations in value.

Step-by-step explanation:

Among the investment choices of government bonds, stocks, mutual funds, and land, stocks are generally considered to be the riskiest investment. Government bonds are seen as low-risk investments because the government is very likely to fulfill its payment obligations. Mutual funds, which pool money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities, have a moderate level of risk and potential return. It is important to understand that with stocks, while they have a higher potential return, they also carry a higher risk due to the volatility in the stock market. The value of stocks can fluctuate significantly based on a variety of factors such as company performance, market conditions, and economic changes. However, over time, investing in stocks has historically provided a higher average return compared to bonds or savings accounts, which is meant to compensate investors for taking on the increased risk.

answered
User Clozach
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