Question

Which of the following is true for bonds but not for stocks?

Answer 1

Bonds are interest-bearing assets and stocks do not.

Option - D

Explanation:

Stocks are an money invested in exchange of company shares (equity investment) that depicts part of ownership in a company and entitles the stock holder to a part of that company's assets and earnings. Stocks do not offer interest rates instead pays dividends and there will not be any fixed returns.

Bonds are interest-bearing or debt security, by which the lender is due to be reimbursed to the holders a debt (based on the negotiated bond terms) and is supposed to pay them interest or to repay principal amount at the maturity date. Zero-coupon bond pays both principal and imputed interest at maturity.

Answer 2

D. Bonds are interest-bearing assets.