Which of the following is a difference between stocks and bonds?
A) Bonds represent ownership; stocks represent debt.
B) Bonds make interest payments; stocks pay dividends.
C) Stock payouts are predictable; bond payouts are not.
D) All of these are differences between stocks and bonds.

Question

Quizplus · Accepted Answer

Bonds make interest payments and stocks pay dividends, this is the key difference between them. Option A is incorrect as stocks represent ownership in the company while bonds represent debt. Option C is incorrect as bond payouts are usually predictable as they are fixed, while stock payouts depend on the company's performance and can vary greatly. Option D is incorrect as options A and C are incorrect.

Which of the Following Is a Difference Between Stocks and Bonds