Question

Which of the following statements is true? a. Bonds have more risk than stocks, but offer more return. b. Stocks have more risk than bonds, but offer more return. c. Stocks tend to offer a greater risk, while bonds tend to offer a greater return. d. Bonds tend to offer a greater risk, while bonds tend to offer a greater return.

Answer 1

Answer:

Option: b is correct.

( Stocks have more risk than bonds, but offer more return).

Step-by-step explanation:

Bonds are debts while stocks are stakes of ownership in a company.  

Bonds pay a fixed rate of interest, and guarantee principal payment at the end of the term, they're generally considered to be safer than stocks. That doesn't mean bonds are 100% safe.

" Most investment professionals consider bonds a safe component of portfolios. They're supposed to provide the stability and certainty that stocks can't "

" In bond we have a fixed interest whereas in stock the rates could go much high "

Hence, option b is correct. ( Stocks have more risk than bonds, but offer more return).