Which best describes the difference between stocks and bonds? a) Stocks allow investors to share in profits; bonds make investors responsible for company debts. b) Stocks allow investors to own a portion of the company; bonds are loans to the company. c) Stocks pay interest to investors throughout the year; bonds only pay interest at fixed times during the year. d) Stocks are a more reliable investment; bonds tend to be more volatile.

SOMEONE ASKED 👇


Which best describes the difference between stocks and bonds? a) Stocks allow investors to share in profits; bonds make investors responsible for company debts. b) Stocks allow investors to own a portion of the company; bonds are loans to the company. c) Stocks pay interest to investors throughout the year; bonds only pay interest at fixed times during the year. d) Stocks are a more reliable investment; bonds tend to be more volatile.

HERE THE ANSWERS 👇

B is the correct answer. Stocks allow investors to become part owners of the company; Bonds are loans to the company.

Explanation:

The primary difference between stocks and bonds the relationship between the investor and the company after purchase.

Stock stands for shares in a company, which means that the person who bought certain business stock will be a shareholder.

A bond, on the other hand, is when someone lends money to an organization and then gets it back with interest.

Interest rates vary depending on the nature of the company and the size of the loan.

Stocks or Bond infographic.Source: https://d2t9h0tyiduyz4.cloudfront.net

Many people wonder which option is best for investing – stocks or bonds?

However, there is no definitive answer. Bonds are safer as there is a high chance of earning money back with interest. Buying stock carries a lot of risk because the return on investment depends on the profitability of the company, but it can generate higher returns on success.

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