Q:
Which of the following investment choices is least risky?
Answer & Explanation
Answer: D) CD's
Explanation: CDs are the least risky investment choice when compared to flipping, renting and bonds.
A certificate of deposit (CD) is a savings certificate with a fixed maturity date, specified fixed interest rate and can be issued in any denomination aside from minimum investment requirements. A CD restricts access to the funds until the maturity date of the investment. CDs are generally issued by commercial banks.
CDs are issued by the bank and are guaranteed by the government. So even if the bank goes bankrupt the investor's money is guaranteed to a certain extent.
Flipping and renting are subjected to market fluctuations while bonds are not insured.
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