Question
Which of the following instruments do not contain Zero
Risk?Solution
The features of Zero Risk are: (i)Â Â Â Â Â Â Â Â Â Â Â It does not have any uncertainty with it (like in case of bonds as interest is known) (ii)Â Â Â Â Â Â Â Â Â Â There is no variation in net cash flow, (like in case of term deposits) (iii)Â Â Â Â Â Â Â Â Â Return on such investment would be lower (like in Govt bonds)
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