Question

What are the 3 main investment categories listed in order from least risk to most risk? group of answer choices

O bonds, stocks, cash
O stocks, bonds, cash
O cash, bonds, stocks
O stocks, cash, bonds

Answer 1

The three main investment categories, listed in order from least risk to most risk, are cash, bonds, and stocks.

Step-by-step explanation:

The three main investment categories, listed in order from least risk to most risk, are:

1. Cash: Cash is the least risky investment option as it typically includes savings accounts and certificates of deposit (CDs). While cash offers low returns, it also has low risk as it is generally stable and easily accessible.
2. Bonds: Bonds have higher risk than cash but offer higher returns. Bonds are debt instruments issued by governments and corporations to raise capital. They involve lending money to the issuer, who promises to pay back the principal plus interest at a future date.
3. Stocks: Stocks are the riskiest investment category but have the potential for the highest returns. When you purchase stocks, you become a partial owner of a company. The value of stocks can fluctuate significantly due to factors such as the company's performance, economic conditions, and market trends.