Question

Identify the investment options as low risk or high risk. A-rated bond, speculative stock, buying a business, blue-chip stock

Answer 1

Low- Risk investments: A-rated bond, Blue chip stock

High- Risk investments: speculative stock, buying a business

PLATO

Answer 2

The correct answer is the following.

Low risk: A-rated bond and blue-chip stock.

High risk: speculative stock and buying a business.

Independent agencies use bond ratings to measure the credit quality of that bond. It is a low-risk investment. Agencies such as Moody's and Standard and Poors, rate bonds so investors can make a better decision. Blue-chip stocks are shares backed by large and famous companies that are serious and give you the confidence to invest. On the other hand, high-risk investments such as the speculative stock are very volatile and it is not for everyone. You have to be a very wealthy man and knowledgable about the stock market to take a risk like this. Another big risk is when you buy a business because nothing guarantees you that is going to endure or work out fine in a determined period.