What are the main characteristics of a bond? How does it differ from a stock?
What will be an ideal response?
A bond is a debt contract with a company. The investor lends an initial amount and is entitled to a certain stream of payments over the lending period. The bond holder can sell their bond at any time to another investor, who will then have the rights to the interest payments. The main risk the bond holder faces is the chance that the company (or government) will default on their bonds and fail to repay them. The key difference between bonds and stocks is that bonds are more predictable in terms of their stream of income. Stocks are considerably more volatile.
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Use the following balance sheet for the First Federal Bank to answer the next question. AssetsLiabilities + Net WorthReserves$60,000Checkable deposits$300,000Loans140,000Stock shares200,000Securities60,000 Property200,000 If First Federal Bank can make no additional loans, then the monetary multiplier is
A. 5.00. B. 6.67. C. 3.00. D. 4.00.
Which of the following would cause an increase in the supply of peanut butter?
A) a decrease in the price of grape jelly (assuming that peanut butter and grape jelly are complements) B) an increase in the price of peanut butter C) an increase in the number of firms that produce peanut butter D) an increase the price of a product that producers sell instead of peanut butter
Logrolling consists of
A) exchanging votes to gain support for legislation. B) spreading the costs of a piece of special interest legislation over many millions of people. C) attempts directed at slowing down the growth of rational ignorance. D) increasing taxes on some people and lowering taxes on other people. E) none of the above
Who said, "It is not the employer who pays wages; he only handles the money. It is the product that pays wages."
A. Henry Ford B. Karl Marx C. Jackson Martindell D. Studs Terkel