QUESTION IMAGE
Question
which type of investments are most at risk for losing value due to inflation?
long - term investments
liquid investments
high - risk investments
mutual fund investments
Long - term investments are most at risk from inflation. Over long periods, inflation erodes the purchasing power of money. For example, a bond with a fixed interest rate over a long term will see its real returns (adjusted for inflation) decrease as inflation rises. Liquid investments can be adjusted or moved more easily, high - risk investments' risk is more about market volatility etc. rather than inflation specifically, and mutual funds can have a mix of investments but long - term fixed - return or slow - growing investments in a mutual fund can also be hit by inflation, but the most direct and significant risk from inflation is for long - term investments.
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long - term investments