Bonds are different from stocks because ________.
A)bonds promise fixed payments for the length of their maturity
B)bonds give payments only after other owners are paid
C)bonds do not have maturity dates
D)bonds promise growth in earnings

Question

Quizplus · Accepted Answer

Bonds promise fixed payments for the length of their maturity, while stocks represent ownership in a company and do not guarantee fixed payments or maturity dates. Option B is incorrect as most bonds have seniority, meaning they will be paid before other owners in the event of bankruptcy or default. Option D is incorrect as bonds do not promise growth in earnings but rather a fixed income. Option C is incorrect as all bonds have maturity dates, which is when the bond issuer must repay the principal amount to the bondholder.

Bonds Are Different from Stocks Because ________