ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Bonds are safer for a reason⎯ you can expect a lower return on your investment. Stocks, on the other hand, typically combine a certain amount of unpredictability in the short-term, with the potential for a better return on your investment.

Detailed explanation-2: -While stocks are ownership in a company, bonds are a loan to a company or government. Because they are a loan, with a set interest payment, a maturity date, and a face value that the borrower will repay, they tend to be far less volatile than stocks.

Detailed explanation-3: -Although bonds may not necessarily provide the biggest returns, they are considered a reliable investment tool. That’s because they are known to provide regular income. But they are also considered to be a stable and sound way to invest your money.

Detailed explanation-4: -Bonds. Bonds tend to be safer than stocks overall, but it’s important to remember that there are good times and bad times to buy bonds, and those times are centered around when prevailing interest rates are changing.