Rank the following investment instruments from least risky to most risky: cash and deposit, derivatives, a well diversified investment portfolio, stock options.

To rank the investment instruments from least risky to most risky, consider the characteristics and typical behavior of each type of investment.

Cash and deposits are generally regarded as the least risky investment. They are typically insured (such as through FDIC insurance in the United States), meaning there is minimal risk of loss. The value of cash and deposits is stable, but they offer very low returns.

Next, a well-diversified investment portfolio is typically considered to have moderate risk. Diversification means spreading investments across various assets, which reduces the impact of any single security's poor performance on the overall portfolio. While there is still inherent market risk, particularly with equity holdings, the diversification strategy lowers the overall risk compared to concentrating investments in a single asset or security.

Stock options come next in terms of risk. They are financial derivatives that derive their value from an underlying asset. Options have the potential for high returns but also come with considerable risk, especially if they expire worthless. Their value is highly volatile, influenced by factors such as the price of the underlying stock, time until expiration, and market conditions.

Lastly, derivatives, being the most complex and leveraged instruments, tend to be the riskiest. The term 'derivatives' encompasses a wide range of financial contracts