Rank the following asset classes in terms of the least riskiest to most riskiest.

Question

-Bonds

-Money Markets

-Real Estate

-Commodities

-Equities

Answer 1

Money Markets

Bonds

Real Estate

Commodities

Equities

Answer 2

Hello Titus Jr.,

This question is very general. In the real world, risk is generally tied to return and volatility. For example, if you invest in US government bonds, your return might not be the highest, but you would have one of the safest investments on the planet. In another example, equities that have paid dividends for the past 25 years can also be some of the safest investments available. Therefore, for a complete response, we need to define the categories of assets more clearly.

Notwithstanding, in general, your asset list ranked from least riskiest to more riskiest is as follows:

Money Markets

Bonds

Real Estate

Equities

Commodities

Some might consider real estate the least risky, but money markets are generally packaged in liquid instruments with lower risks, such as commercial paper, and as a result, are relatively safe.

I hope this helps with your study of this topic.

Sincerest Regards,

Joe D.