Question

Which investment is most subject to inflation risk?

A Treasury bonds
B Treasury bills
C Utility stocks
D Blue chip industrial stocks

Answer 1

Treasury bonds are most subject to inflation risk.

Step-by-step explanation:

Among the given investment options, Treasury bonds are most subject to inflation risk. Treasury bonds are long-term government bonds that typically have fixed interest rates. If inflation rises while holding Treasury bonds, the purchasing power of the fixed interest payments from the bond decreases, leading to a decrease in the real value of the bond.