Which of the Following Financial Instruments Entails the Most Risk

question 23

Multiple Choice

Which of the following financial instruments entails the most risk and potentially the highest returns for investors?

• A)Debt with a maturity of less than one year
• B)Bonds
• C)Ordinary shares
• D)Preference shares

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Definitions:

Low Values

Refers to measurements or quantities that are significantly below average or expected levels.

Voltmeter

An instrument used for measuring electrical potential difference between two points in an electric circuit.

Analog Meter

A measuring instrument with a moving pointer that displays readings on a graduated scale, used for measuring physical quantities like voltage or current.

Galvanometers

Instruments used to detect and measure small electric currents by deflection of a pointer in the presence of magnetic fields.