Which of the following investments has the highest level of

Which of the following investments has the highest level of risk: STOCKS, BONDS, or MUTUAL FUNDS. Rate the risk for each investment.

Solution

STOCKS has the highest level of risks

RATING :

STOCKS we know is ownership in a company. When we buy a stock, we buy a piece of the company. So if the company does well, we do well. IT has good return but we also know  with more return comes more risk. So when investing in stocks, keep in mind that you have to be able to handle the extra risk to reap the potential reward in the long run.

BONDS are less risky than stocks and the main way you lose money on a bond is if the company or government issuing the bond defaults on their obligations.

MUTUAL FUND is like a basket of stocks or bonds, different mutual fund have different schemes , one should go through the information like  fund’s investment objective, risks, fees, and expenses before investing