Question

Why is a high-quality bond typically considered a lower-risk investment than a stock

Answer 1

A bond typically pays a fixed, predictable amount of interest each year.

High-quality bonds are forms of debts issued to firms or companies for a minimum of one year or more. On the hand, stocks are the capital that a business will get by selling out its shares to investors. When these two are combined and compared, high-quality bonds are considered lower risks investments than stocks due to their higher payout. High-quality bonds will be consistent in terms of payout throughout each period while stocks might vary depending on the performance of the company. High-quality bonds are also recession resistant and will get paid first before stake holders in case a company falls .

Answer 2

Its high quality bond typically considered a lower risk investment than a stock because you need to find the answer on your own