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Arrange the types of investments in the correct order from the least risky to the most risky investment.

1) Starting a new business
2) AAA-grade bond
3) Property
4) Speculative stock

User Netero
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1 Answer

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Final answer:

From least to most risky, the correct order of investments is: AAA-grade bond, property, speculative stock, and starting a new business. Each type of investment carries varying levels of risk and potential returns. The correct option is B.

Step-by-step explanation:

When it comes to arranging types of investments from the least risky to the most risky, one must consider the tradeoff between the expected return and the degree of risk involved. Understanding this relationship is crucial for investors to align their investments with their risk tolerance and financial goals.

Starting with the least risky, a AAA-grade bond is at the bottom of the risk spectrum. These are bonds given the highest rating by credit agencies, indicating that they are a highly secure investment, with a very low likelihood of default.

Next, property investment carries a moderate level of risk. It can provide stable returns through rental income and potential appreciation in value, but it can be affected by market fluctuations.

Moving up the risk ladder, speculative stock refers to investments in stocks that are considered high-risk due to their volatile nature, uncertain financial prospects, or other factors.

The riskiest investment among the options provided is starting a new business. It carries a significant degree of risk because many new businesses fail within the first few years due to various challenges and lack of a proven track record.


  1. AAA-grade bond

  2. Property

  3. Speculative stock

  4. Starting a new business

User Volodymyr Kret
by
8.7k points
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