Out of the following options below, which one has the lowest level of risk, and which one has the highest level of risk? Treasury bills Certificates of Deposit Commercial paper Treasury notes and bonds Municipal bonds Corporate bonds Mortgage-and asset-backed securities Common stocks Preferred stocks
Out of the following options below, which one has the lowest level of risk, and which one has the highest level of risk? Treasury bills Certificates of Deposit Commercial paper Treasury notes and bonds Municipal bonds Corporate bonds Mortgage-and asset-backed securities Common stocks Preferred stocks
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Out of the following options below, which one has the lowest level of risk, and which one has the highest level of risk?
Treasury bills
Certificates of Deposit
Commercial paper
Treasury notes and bonds
Municipal bonds
Corporate bonds
Mortgage-and asset-backed securities
Common stocks
Preferred stocks
Expert Solution
Step 1: Define risk assessment use
Risk assessment is used by investors and financial professionals to create portfolios that are in line with their risk tolerance and employ risk mitigation techniques like diversification or the use of hedging instruments.
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