ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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mature quickly.
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have high interest rates.
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take a long time to mature.
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none of the above
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Detailed explanation-1: -They provide a predictable income stream. Typically, bonds pay interest twice a year. If the bonds are held to maturity, bondholders get back the entire principal, so bonds are a way to preserve capital while investing. Bonds can help offset exposure to more volatile stock holdings.
Detailed explanation-2: -U.S. Treasury bonds are widely considered the safest investments on earth. Because the United States government has never defaulted on its debt, investors see U.S. Treasuries as highly secure investment vehicles.
Detailed explanation-3: -The three types of bond funds considered safest are government bond funds, municipal bond funds, and short-term corporate bond funds.
Detailed explanation-4: -Stocks offer an opportunity for higher long-term returns compared with bonds but come with greater risk. Bonds are generally more stable than stocks but have provided lower long-term returns. By owning a mix of different investments, you’re diversifying your portfolio.