Which of the following investments is the most risky?
A)taking a 50% equity position in a project and borrowing the rest of the cost
B)lending 100% of the money needed for a project
C)taking a 100% equity position in a project
D)taking a 10% equity position in a project and borrowing the rest of the cost

Question

Quizplus · Accepted Answer

Taking a 100% equity position in a project is the most risky because the investor is fully exposed to the success or failure of the project. If the project fails, the investor stands to lose their entire investment. Unlike debt financing, there is no guaranteed return, and the potential for loss is higher.

Which of the Following Investments Is the Most Risky