Why are government bonds considered more liquid than corporate stocks? Select one: a. Bonds are easier...
Why are government bonds considered more liquid than corporate stocks?
Select one:
a. Bonds are easier to purchase than corporate stocks
b. The bonds market is larger (is worth more money) than the stock market
c. Bonds can be sold more quickly than stocks
d. Bonds do not fluctuate in price as much as stocks
e. Bonds and stocks are actually equally liquid
Homework Answers
Option B is correct.
Corporate bonds all have some level of default risk. Government bonds are used as a benchmark by the market because they have no default risk. A major difference is liquidity, which will be much lower for corporate bonds, since the volumes of government bonds issued are much higher.
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4th: common stocks, preferred stocks, corporate bonds
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