0
Because unless the company defaults on the bond, a bond features three knowns: how much it pays, when it pays and how many times it pays. Let's use the simplest kind of bond to calculate: a five-year $1000 zero-coupon bond sold at a 25 percent discount. This bond will sell at $750--25 percent off the face value--and will pay $1000 to whoever holds it the day it matures. Here we know: We know the bond pays $250, answering "how much." We know it pays in five years, answering the "when." And we know it pays one time, answering the "how many times." Stocks don't do that. They gain and lose value as a matter of course. They don't necessarily pay dividends. They split. They are a much more dynamic investment than bonds, but the dynamism is repaid by stock giving a potentially higher return on investment than bonds.
Wiki User
∙ 15y ago
Add your answer:
Earn +20 pts
Why are US Bonds considered a safe investment?
cuz it isssssss
Why is an investment grade bond is considered a safe investment?
Investment grade bonds are considered a safe investment because there is generally only a small risk of loss of principle when they are issued by highly rated corporations, U.S. government agencies or by the United States government, especially compared to higher risk investments like stocks. There is also a periodic coupon payment that provides a consistent income which the issuer of the bonds is obligated contractually to pay.
Are bank bonds a safe investment option?
Depending on the return you are looking foe bank bonds are good. Bank bonds also are very safe.
Why do lenders put their money into government bonds?
Because these bonds are considered a very low risk dependable investment.
Why is certificate of deposit considered such a safe investment?
it is guarantee by the federal government.
Why are US Bonds considered a safe investment?
cuz it isssssss
Are municipal bonds a sound form of investing?
Municipal offer a very safe investment for a marginal return,this is considered a good investment.
Are muni bonds a safe investment?
The muni bonds are fairly safe investment. Thesis municipal bonds are issued by local government or municipalities. In most of the cases the interest earned from these bonds is exempted from income tax.
Why is an investment grade bond considered a safe investment?
Investment grade bonds are considered a safe investment because there is generally only a small risk of loss of principle when they are issued by highly rated corporations, U.S. government agencies or by the United States government, especially compared to higher risk investments like stocks. There is also a periodic coupon payment that provides a consistent income which the issuer of the bonds is obligated contractually to pay.
Why is an investment grade bond is considered a safe investment?
Investment grade bonds are considered a safe investment because there is generally only a small risk of loss of principle when they are issued by highly rated corporations, U.S. government agencies or by the United States government, especially compared to higher risk investments like stocks. There is also a periodic coupon payment that provides a consistent income which the issuer of the bonds is obligated contractually to pay.
Are bank bonds a safe investment option?
Depending on the return you are looking foe bank bonds are good. Bank bonds also are very safe.
What is a good strategy to invest in municipal bonds?
There is no strategy to speak of. Municipal bonds are a low-yield, long-term sure investment, all characteristics of a safe investment.
Which of these would not be considered a private investment when calculating the GDP?
stocks and bonds.
Are there any tax advantages to municipal bonds?
Municipal bonds provide a great investment tool with some tax advantages. This is also a very safe investment with very low risk.
Do you buy bonds for a short-term or a long-term investment?
Bonds are generally considered long-term obligations.
Why do lenders put their money into government bonds?
Because these bonds are considered a very low risk dependable investment.
Why is certificate of deposit considered such a safe investment?
it is guarantee by the federal government.
