Which of the following is true for bonds but not for stocks?


A. Bonds are the least liquid form of assets.

B. Bonds earn variable rates of return.

C. Bonds represent partial ownership in a company.

D. Bonds are interest-bearing assets.

E. Bonds have zero opportunity cost.

Respuesta :

D. Bonds are interest-bearing assets.









Bonds are interest-bearing assets and stocks do not.

Option - D

Explanation:

Stocks are an money invested in exchange of company shares (equity investment) that depicts part of ownership in a company and entitles the stock holder to a part of that company's assets and earnings. Stocks do not offer interest rates instead pays dividends and there will not be any fixed returns.

Bonds are interest-bearing or debt security, by which the lender is due to be reimbursed to the holders a debt (based on the negotiated bond terms) and is supposed to pay them interest or to repay principal amount at the maturity date. Zero-coupon bond pays both principal and imputed interest at maturity.