Question

What asset has a higher risk Gold or US equities?

What asset has a higher risk Gold or US equities?

Homework Answers

Answer #1

The asset with a higher risk is US equities in comparison of Gold. Many times the gold has outperformed the other asset classes including equity maker in US. The risk and return tradeoff is better for gold as it is considered one of the less risky asset classes for investors. The investment in gold is used as hedge against political instability or the devaluation of currency. Therefore whenever there is more uncertainty in equity market or it become riskier, the investors use to shift to gold investment as it is considered less risky.

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