1. What are the primary differences between investments in corporate stock versus corporate bonds?
2. Since bonds pay interest, does that imply the individuals risk exposure is less for investing in bonds rather than stock?
3. What are the mechanics of purchasing bonds? May the investor leave the bonds with his or her broker?
4. Since a bond has a maturity date, does that imply the investor holds the bond to maturity?
5. Can the investor expect to earn higher returns on a firm’s bonds than on it’s stock?
6. Are high-yield securities an acceptable investment club or its members?
1. Corporate stock is a certificate of ownership of the underlying corporate entity but corporate bond is a loan given by the subscriber to the underlying corporate entity.
2. Yes, it implies that the individuals risk exposure is less for investing in bonds rather than stock. Hence, the risk is lesser …
The solution gives detailed answer to various questions on investing bonds or stocks.