Which of the following describes the risk levels in the investment pyramid from top to bottom?

The investment pyramid is a useful visual tool that categorizes different types of investments based on their risk levels and potential returns. At the top of the pyramid are the most speculative investments, which typically offer higher potential returns but also come with greater risk, including the possibility of losing the entire capital invested. These include things like stocks, commodities, and alternative investments.

As you move down the pyramid, the risk associated with investments decreases. The middle tier generally consists of moderate-risk investments, like balanced funds or investment-grade corporate bonds, which provide a reasonable return with some level of security. Finally, at the bottom of the pyramid, you find the lowest-risk investments, such as government bonds or savings accounts. These are characterized by their stability and predictability but generally offer lower returns.

Thus, the structure clearly shows that risk levels start high at the top and decrease as one moves down to the base. Understanding this hierarchy assists investors in aligning their investment choices with their risk tolerance and financial goals.