Which one of these is considered to be the safest investment? A. U.S. Treasury b

ID: 2754167 • Letter: W

Question

Which one of these is considered to be the safest investment?

A. U.S. Treasury bonds

B. Common stock

C. U.S. Treasury bill

D. Preferred stock

The idea that investors in a common stock may expect a lower total return if they purchase a

stock with limited price volatility rather than one with high price volatility suggests that:

A. investors are irrational.

B. there is a relationship between risk and return.

C. real rates of return will be lower during periods of price stability.

D. stocks should be avoided when inflation is low.

The correct answer is option A.

US Treasury bonds are the safest bonds as they carry risk free interest rate.

They have zero risk and it is safe to invest in Us Treasury bonds.

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