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Week 3 Risk 3 - during times of increased inflation Stocks...

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Some examples of the different types of business investments are cash investments, real estate, commodities, derivatives, mutual funds, debt securities, and stocks. I found a very interesting article that gave some insight into the risk associated with each one of these options that businesses may take advantage of. Derivatives – may be used to reduce the risk involved in changes in the value of the core assets. Cash Investments – usually accompanied by a smaller rate of interest and can be very risky
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Unformatted text preview: during times of increased inflation. Stocks and bonds – Stocks are riskier than bonds. Although bonds may not be as risky, their returns may also be lower than other options for investment. Mutual Funds – a mixture of stocks and bonds in which a professional manages the securities on your behalf. The risks will vary depending on the specific mixture of stocks and bonds. Commodities- generally associated with higher risk and rates of return. Source: http://www.economywatch.com/investment/...
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