Rank the following investment instruments from least risky to most risky: Cash and deposit, Stock options, A well diversified investment portfolio of a company, Derivatives.

To rank the investment instruments from least risky to most risky, it's essential to understand the inherent risks associated with each category.

Starting with cash and deposits, these are generally considered the least risky. They typically offer lower returns but are backed by financial institutions or governmental insurance schemes, making them very secure.

Next is a well-diversified investment portfolio of a company. Diversification helps to mitigate risk by spreading investments across various assets, reducing the impact of any single investment's poor performance. While there is inherent risk associated with equities, a diversified portfolio generally offers a balance and can be considered relatively stable compared to individual stocks or stock options.

Following that, we have derivatives. These financial instruments can vary widely in risk depending on how they are used. They can result in high returns, but they also carry substantial risks since their value is derived from underlying assets that can be highly volatile. Mismanagement or a poor understanding of the market can lead to significant losses.

Finally, stock options are often placed at the top of the risk hierarchy. They provide the right, but not the obligation, to buy or sell stocks at a predetermined price. However, their value can fluctuate dramatically and can expire worthless, making them one of the most risky investments for individual investors.

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