Which of the following correctly orders the investments from LOWER risk to HIGHER risk?

A Treasury bond − Stock − Diversified mutual fund

B Stock − Treasury bond − Diversified mutual fund

C Treasury bond − Diversified mutual fund – Stock

D Diversified mutual fund − Treasury bond − Stock

Question

23-03-2017
Social Studies

Answered

Which of the following correctly orders the investments from LOWER risk to HIGHER risk?

A Treasury bond − Stock − Diversified mutual fund

B Stock − Treasury bond − Diversified mutual fund

C Treasury bond − Diversified mutual fund – Stock

D Diversified mutual fund − Treasury bond − Stock

Verified Answer :

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Kalahira Kalahira · Answer 1 · 2018-01-10T16:22:09-05:00

The answer is C. The treasury bond is a bond issued by the government - US Treasury. This is a low risk investment since they are backed up by the government which take the full faith and credit. Diversified mutual bond comprises a wide array of securities to lessen the risk in the fund. And lastly, stock. This signifies the share you hold in the company. It is considered a high risk because when the company's stock drops, your stock in that company will drop too.

soneyedesola44 soneyedesola44 · Answer 2 · 2019-09-05T12:07:06-04:00

The correctly orders is Treasury bond − Diversified mutual fund – Stock

Treasury bond is often refers to as T-bond. It is federal government debt security that attracts interest till maturity, in which the owner of the bond is also paid an amount that equals the principal.

Further Explanation

The Treasury bond constitutes the larger group of government bonds. It can also be described as the type of bond that is issued by the government with commitment to pay interest payments and the principal when it matures. The interest payment is also known as coupon payment. The risk involve in Treasury bond is very low because it is legally backed up by the government.

A diversified fund is a type of mutual funds that automatically provide certain level of diversification to investors. It can as well be described as a fund that is diversified within geographical locations or regions. Diversified fund across sectors or geographical locations helps in preventing events that are abnormal in one area from affecting the whole portfolio. The main purpose of diversified fund is actually to protect investors’ assets. The risk here is also minimal.

Stock is types of securities that show equal ownership in the issuing cooperation. Stocks can only be bought and sold on stock exchanges. In some cases, private entities can also sell stock. However, private entities that sell stocks must transact in line with government rules and regulation. This is to protect investors from illegal or fraudulent activities. The risk of investing in stock can be high due to the fact it can be manipulated and sometimes its value might drop.

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investments from lower risk to higher risk https://brainly.com/question/1336631

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diversified mutual fund
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