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How does a risk-free investment differ from a low-risk investment?

Curious about risk-free investment

How does a risk-free investment differ from a low-risk investment?

A riskfree investment is an investment option where there is no risk of losing the principal amount invested. The return on such investments is usually low but guaranteed. Examples of such investments include government bonds and fixed deposits with a bank or a financial institution.

On the other hand, a lowrisk investment is an investment option where there is a possibility of losing some portion of the principal amount invested, but the risk of loss is relatively low. The returns on such investments are usually higher than riskfree investments. Examples of lowrisk investments include bluechip stocks, mutual funds, and corporate bonds.

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