MANAGEMENT

Detailed explanation-1: -Stocks have historically delivered higher returns than bonds because there is a greater risk that, if the company fails, all of the stockholders’ investment will be lost (unlike bondholders who might recoup fully or partially the principal of their lending).

Detailed explanation-2: -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.

Detailed explanation-3: -Bonds generally provide higher returns with higher risk than savings, and lower returns than stocks. But the bond issuer’s promise to repay principal generally makes bonds less risky than stocks.

Detailed explanation-4: -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-5: -Bonds tend to be less volatile and less risky than stocks, and when held to maturity can offer more stable and consistent returns. Interest rates on bonds often tend to be higher than savings rates at banks, on CDs, or in money market accounts.