Your friend claims that he has invested in stocks and bonds. As a budding economist, would...
Your friend claims that he has invested in stocks and bonds. As a budding economist, would you agree/disagree with your friend's claim? Support your answer with a brief ( 2-3 LINES ONLY)explanation.
Homework Answers
Yes, I would agree, the stocks and the bonds are different. The stock of the firm represents the ownership of the company, and this carries the ownership interest. While the bonds are the instruments that promises to pay back the money with the interest, the bonds does not reflect the ownership right of the company. For bonds the return is guaranteed and for the stocks it is not, the stocks provides the voting rights in the company and while the bonds do not.
The stocks represents the ownership, the bond represents the debt. Investors will try to diversify their portfolio with investing in stocks and bonds.
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Your friend claims that he has invested in stocks and bonds. As
a budding economist, would...
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