Certified Financial Planner (CFP) Practice Exam · Question
Scenario 29: 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: Scenario 29: 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. The correct answer is "Government bonds". This capacity-fill scenario 29 reinforces the same competency for the cfp bank and follows the certified explanation standard.
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