8
QuizMultiple Choice

Investing and Financial Markets — Unit test

Question 8 • Personal Finance - EL3403

In what order should the following investment choices be placed, from least risk to highest risk?

Answer
A
short-term bonds, savings accounts, stocks, mutual funds
B
stocks, mutual funds, short-term bonds, savings accounts
C
savings accounts, short-term bonds, mutual funds, stocks
D
mutual funds, stocks, savings accounts, short-term bonds

Explanation

Savings accounts generally have the least risk because their balances are stable and often insured. Short-term bonds can fluctuate in value, but usually carry less risk than investments in stocks. Mutual funds can hold a mix of investments and have varying risk, while stocks are generally the riskiest in this comparison. So the order is savings accounts, short-term bonds, mutual funds, then stocks.

AI-written and checked against the verified answer.

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