Compared to bonds, stocks generally provide a _____ return and carry a _____ financial risk.

Question

Quizplus · Accepted Answer

Stocks generally provide a higher return compared to bonds, but they also carry a higher financial risk. This is because when you invest in a stock, you are essentially buying a small piece of ownership in a company, and the value of that ownership can go up or down based on various factors such as company performance, market conditions, and investor sentiment. On the other hand, when you invest in a bond, you are essentially lending money to a company or government entity, and you receive a fixed interest payment in return. Bonds are generally considered less risky than stocks because they offer a fixed income stream and are typically less volatile. Therefore, the best choice is option C.

Compared to Bonds, Stocks Generally Provide a _____ Return and Carry