ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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have a guaranteed rate of return.
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provide ownership in a business
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have relatively high levels of risk.
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are tied to the rate of inflation.
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Detailed explanation-1: -As you can see, each type of investment has its own potential rewards and risks. 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.
Detailed explanation-2: -What Are the Similarities Between Bonds and Stocks? Bonds and stocks are both financial securities with respective risks and rewards. Stocks are usually a riskier investment than bonds, because of the numerous factors that can cause their prices to fluctuate, but they can generate higher return rates.
Detailed explanation-3: -Bonds in general are considered less risky than stocks for several reasons: Bonds carry the promise of their issuer to return the face value of the security to the holder at maturity; stocks have no such promise from their issuer.
Detailed explanation-4: -What’s the difference between stocks and bonds? The main difference between stocks and bonds is that stocks give you partial ownership in a corporation, while bonds are a loan from you to a company or government.