The correctly orders is Treasury bond − Diversified mutual fund – Stock
Treasury bond is often refers to as T-bond. It is federal government debt security that attracts interest till maturity, in which the owner of the bond is also paid an amount that equals the principal.
The Treasury bond constitutes the larger group of government bonds. It can also be described as the type of bond that is issued by the government with commitment to pay interest payments and the principal when it matures. The interest payment is also known as coupon payment. The risk involve in Treasury bond is very low because it is legally backed up by the government.
A diversified fund is a type of mutual funds that automatically provide certain level of diversification to investors. It can as well be described as a fund that is diversified within geographical locations or regions. Diversified fund across sectors or geographical locations helps in preventing events that are abnormal in one area from affecting the whole portfolio. The main purpose of diversified fund is actually to protect investors’ assets. The risk here is also minimal.
Stock is types of securities that show equal ownership in the issuing cooperation. Stocks can only be bought and sold on stock exchanges. In some cases, private entities can also sell stock. However, private entities that sell stocks must transact in line with government rules and regulation. This is to protect investors from illegal or fraudulent activities. The risk of investing in stock can be high due to the fact it can be manipulated and sometimes its value might drop.
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