Which investment is the riskiest but has the potential to?
Answer. B) stocks is the riskiest, but has the potential to earn you the most money?
- Options. An option allows a trader to hold a leveraged position in an asset at a lower cost than buying shares of the asset. ...
- Futures. ...
- Oil and Gas Exploratory Drilling. ...
- Limited Partnerships. ...
- Penny Stocks. ...
- Alternative Investments. ...
- High-Yield Bonds. ...
- Leveraged ETFs.
Among the listed options that can be considered investments, the stock carries a higher risk. They bring a higher return on investment, but also have a bigger chance of failing because they are tied to the performance of certain companies. If the company performs well the price of stocks will be higher.
Final answer:
Stocks are the riskiest but potentially most lucrative investment option, while savings accounts, treasury bonds, and municipal bonds are less risky but offer lower returns.
corporate stocks can be considered as the riskiest investment. Investment is risky when returns are uncertain.
Mutual funds are the riskiest type of investment. The difference between a chosen investment and one that is passed up is _____.
Stocks are generally considered to be riskier than bonds, cash alternatives and commodities. While both bonds and cash alternatives offer the investor a promised rate of return, stocks offer no such guarantee.
While the product names and descriptions can often change, examples of high-risk investments include: Cryptoassets (also known as cryptos) Mini-bonds (sometimes called high interest return bonds) Land banking.
Uses of Risk-Return Tradeoff
Examples of high-risk, high-return investments include options, penny stocks, and leveraged exchange-traded funds (ETFs).
- High-yield savings accounts.
- Money market funds.
- Short-term certificates of deposit.
- Series I savings bonds.
- Treasury bills, notes, bonds and TIPS.
- Corporate bonds.
- Dividend-paying stocks.
- Preferred stocks.
Which of the following investments is the riskiest but also offers the highest potential return on average?
Answer and Explanation:
Stock investment has a large potential for growth and earnings, but it is also highly risky as these elements are not guaranteed.
Unlike saving, investing involves taking on some risk, but it also has the potential to earn higher returns over the long term. Investing is a way to reach long-term financial goals, such as saving for college, a down payment on a house, or retirement.
With risk comes reward.
Bonds are safer for a reason⎯ you can expect a lower return on your investment. Stocks, on the other hand, typically combine a certain amount of unpredictability in the short-term, with the potential for a better return on your investment.
Creative investment strategies involve the highest risk. Aggressive investment strategies involve high-risk investments.
At the low-risk end of the spectrum are basic investments such as Certificates of Deposit (CDs); bonds or fixed-income instruments are higher up on the risk scale, while stocks or equities are regarded as riskier. Commodities and derivatives are generally considered to be among the riskiest investments.
At the top of the pyramid, with the highest risk and highest potential for return, are commodities, followed by antiques and collectibles, real estate, stocks, mutual funds, corporate bonds, Treasury securities or government bonds, certificates of deposit, savings accounts, and at the bottom of the pyramid, with the ...
Stocks. Stocks are the riskiest financial securities among all the securities mentioned in the question. Because of this, the potential rate of return for stocks is the largest.
A risk asset is an asset that has high volatility in price. Bitcoin and other cryptocurrencies are just some of the risky asset classes. Stocks can be risky as well. However, some assets are still safe and guarantee safe returns.
Equity Mutual Funds are prone to many risks but the most significant one is market risk. Equity Mutual Funds as a category are considered 'High Risk' investment products.
High-yield bonds face higher default rates and more volatility than investment-grade bonds, and they have more interest rate risk than stocks. Emerging market debt and convertible bonds are the main alternatives to high-yield bonds in the high-risk debt category.
What are 3 risky investments?
High-risk investments include currency trading, REITs, and initial public offerings (IPOs). There are other forms of high-risk investments such as venture capital investments and investing in cryptocurrency market.
Shares investments are more volatile, and generally returns more over time, than property investments. Therefore, we can say that while the shares are riskier than property, the returns were also greater.
Common stock appreciates and has optional dividends. Common has the greatest risk potential and greatest reward potential.
Stocks generally offer a larger potential return on your investment than lower-risk investments like government bonds, but also may expose your money to higher levels of volatility. Best for: Investors with a well-diversified portfolio who are willing to take on a little more risk.
Given the numerous reasons a company's business can decline, stocks are typically riskier than bonds. However, with that higher risk can come higher returns. The market's average annual return is about 10%, not accounting for inflation.
