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    Question

    Which of the following instruments do not contain Zero

    Risk?
    A Investment in Shares Correct Answer Incorrect Answer
    B Investment in Bonds-and Debentures Correct Answer Incorrect Answer
    C Investment in Term Deposits Correct Answer Incorrect Answer
    D Investment in Government Bonds Correct Answer Incorrect Answer
    E none of the above Correct Answer Incorrect Answer

    Solution

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

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