Final answer:
Individuals with low risk tolerance should consider savings and money market savings accounts due to their low risk and stable returns, whereas corporate bonds might also be suitable if they are investment-grade. Collectibles and investment real estate are generally not recommended for those with low risk tolerance. Option 4 is the correct answer.
Step-by-step explanation:
If a person has a low risk tolerance, they should consider investments that are less volatile and more stable. Among the options listed, savings and money market savings accounts are generally considered the safest investments. These types of accounts typically offer lower returns but come with a significantly reduced risk of losing the invested capital. Corporate bonds can also be appropriate for those with lower risk tolerance, especially if they are investment grade, as they generally offer fixed interest payments and return of principal at maturity, albeit with a higher risk compared to bank accounts.
Investment real estate and collectibles may not be suitable for someone with low risk tolerance, as they can be subject to market fluctuations, liquidity issues, and may require extensive knowledge or additional resources to manage effectively. It is important for investors to match their investments with their individual risk tolerance and financial goals. For those uncomfortable with the potential for loss, staying with more secure options like savings accounts may be the best strategy.
In conclusion, the correct option answer for an individual with low risk tolerance would be 4) savings and money market savings accounts.