Question

I need some help with these questions for economics please.

Answer 1

1. The difference between a bond and a stock is that stocks are shares that represent ownership in a company, and bonds are a form of long-term debt where you invest your money (essentially, a business loans money FROM you and promises to pay it back by a certain date). You should see a sizable return at the end of a bond's maturity date.

2. What makes a mutual fund an attractive investing option is that it is a diversified portfolio of different investments, such as bonds and stock. Since it is more spread out there is less overall risk.

3. A commercial bank differs from a Savings and Loan (S&L) association because S&L associations are more focused on residential mortgage, whereas commercial banks work more with large businesses.

4. A commercial bank differs from a credit union because most credit unions are not-for-profit establishments with their earnings paid back in the form of lower loan rates and higher savings rates. Commercial banks are for-profit and whatever they earn are paid back to stockholders only.