Certified Financial Planner (CFP) Practice Exam · Question
Which of the following investment types carries the highest inflationary risk for a long-term investor?
Fixed-income investments like government bonds are highly susceptible to inflationary risk because the purchasing power of their fixed future payments erodes ov
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Question: Which of the following investment types carries the highest inflationary risk for a long-term investor?
Answer options:
- Common stocks
- Real estate ✅ Government bonds
- Precious metals
Correct answer: Government bonds
Explanation: Fixed-income investments like government bonds are highly susceptible to inflationary risk because the purchasing power of their fixed future payments erodes over time with rising inflation.
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