Ownership investments are more vulnerable to deflation risk than lending investments.

Question

Quizplus · Accepted Answer

Ownership investments like stocks and real estate are directly impacted by deflation as their value can decrease significantly in a deflationary environment. On the other hand, lending investments like bonds and CDs may offer some protection against deflation by providing a fixed rate of return, although they may still be impacted if inflation-adjusted returns turn negative.

Ownership Investments Are More Vulnerable to Deflation Risk Than Lending