question archive What is a good investment for the following scenario listed below? and why? o Public Company Stock o Government Bonds o Certificate of Deposit o Private Equity Investments o Commodities (Gold, Silver, Copper, etc
What is a good investment for the following scenario listed below? and why? o Public Company Stock o Government Bonds o Certificate of Deposit o Private Equity Investments o Commodities (Gold, Silver, Copper, etc
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What is a good investment for the following scenario listed below? and why?
o Public Company Stock
o Government Bonds
o Certificate of Deposit
o Private Equity Investments
o Commodities (Gold, Silver, Copper, etc.)
o Mutual Funds
o Option Contracts
o ETF Funds
o Foreign Currency
1. You notice inflation rates are increasing to high levels in recent years. You already have investments in Stock (Equity). You are thinking about moving your cash balance left in your account into another investment option. From the list above, what type of investment would you choose during periods of high inflation and why?
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I would invest my cash in commodities (Gold, Silver, Copper, etc.) as commodities are most often considered a hedge against inflation. In an inflationary situation the general prices in the economy rises at a drastic rate therefore the prices of goods and services also increases and a large amount of money chases after a small quantity of goods resulting in a high demand than the available supply which increases the prices of the goods. So when investing in commodities it is always profitable to invest in precious metals such as gold, platinum, silver and keep them in reserve.
