Answer:
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You are choosing whether to purchase a bond or stock. if you purchase the bond, you are likely to receive a lower return in exchange for a lower level of risk.
Bonds is a term or entity in the financial world to describe a form of fixed-income security that has its terms stipulated in an indenture or legal contract. On the other medium of exchange is an entity used in a transaction to exchange goods or services. In modern times, the medium of exchange is currency or money.
Stocks and bonds represent two different ways for an entity to raise money to expand their operations. Stocks are simply shares of individual companies but when an entity issues a bond, it is actually issuing debt with the agreement to pay interest for the use of the money. A stock makes you an owner of a business while a bond is just a loan to a business or a person.
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