Question on Investment Risk

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geek84
geek84 Registered Posts: 568 Epic contributor 🐘
in AAT Level 3 (Level 6 in Scotland)
Hi folks

I hope you're all well and studying hard!!

Anyway, I wonder if any of you kind folks out there would be able to help me with the following question -

If the question askes you to put the follwing types of investment in order from Highest Risk to Lowest Risk, what would be the correct order of te following -

Interbank markets
TReasury Bills
Gilts
Local Authoriyry Bills
Euro Securiti4es
Certificats Of Deposits
Bills Of Exchange
Corporate Bonds

Could you also give a brief explanation of the answer.

Thanks in advance for your response.

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  • pirate
    pirate Registered Posts: 469 Dedicated contributor 🦉
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    Geek84

    you basically have to think of these investments in terms of the risk of losing your investment.
    If you think of your personal life, and say you had £1000 the most risky would be perhaps to place it on the horses you may get a good return but the risk of you losing that £1000 is really high

    Generally the lower the return from the money and the ones with the guarantee to get your investment back are the least risky

    Your book should explain the kind of returns you can expect from each type of investment
    So think about the most risky and that goes at the top

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