Which of the Following Investments Is the Most Risky

question 57

Multiple Choice

Which of the following investments is the most risky?

• A)taking a 50% equity position in a project and borrowing the rest of the cost
• B)lending 100% of the money needed for a project
• C)taking a 100% equity position in a project
• D)taking a 10% equity position in a project and borrowing the rest of the cost

---

Definitions:

Japan

A country located in East Asia, known for its rich culture, technological advancements, and economic significance.

Bond

A fixed income instrument that represents a loan made by an investor to a borrower, usually corporations or governmental agencies, which includes the terms of the loan, interest payments, and the time at which the loaned funds must be repaid.

Interest Rate Parity

An economic theory stating that the difference in interest rates between two countries is equal to the expected change in exchange rates between their currencies.

Unbiased Forward Rates

Financial theory suggesting that forward exchange rates should be an unbiased predictor of future spot exchange rates.