Common stock is riskier than bonds. Common stock fluctuates in price as a matter of course. Bonds tell you What they will pay, When they will pay it and For How Long they will pay it. Assuming the company doesn't go into default, bonds are safe. (The risk of bonds is that companies DO go into default, which is why bonds are rated.)
Yes, you can lose a stock, and you can lose a bond, but bonds are harder to lose, and can never decrease in value.
Stocks are considered much more liquid than bonds. This is because stocks are riskier and the value of the stock is determined by the present market.
It's riskier.
Because the price of a stock varies every minute of a trading day and it may go up or down based on the market sentiment and the company's performance. Your investment may lose value heavily in case of a market crash and hence they are much riskier when compared to Saving money in a bank
Common stock is riskier than bonds. Common stock fluctuates in price as a matter of course. Bonds tell you What they will pay, When they will pay it and For How Long they will pay it. Assuming the company doesn't go into default, bonds are safe. (The risk of bonds is that companies DO go into default, which is why bonds are rated.)
Yes, you can lose a stock, and you can lose a bond, but bonds are harder to lose, and can never decrease in value.
Stocks are considered much more liquid than bonds. This is because stocks are riskier and the value of the stock is determined by the present market.
It's riskier.
just give me a explain
The stock options Incentive Stock Option(ISO)is a method of stocks that can managed by employees. It can be used for tax benefits. It is a bit riskier than the NSO.
AnswerYes, Treasury bonds generally "trend" in the opposite direction from the stock market.
The stock market risks fluctuate, in part due to the economy. So, in theory, it may be riskier in the current economy. However, an investor in the market always risks losing money.
Because the price of a stock varies every minute of a trading day and it may go up or down based on the market sentiment and the company's performance. Your investment may lose value heavily in case of a market crash and hence they are much riskier when compared to Saving money in a bank
Because the future cashflows are more uncertain for a stock than a bond.
A balanced investment portfolio would include both stocks and bonds as well as cash and mutual fund. The mix would depend on your investment objectives and tolerence for risk. If you had to pick just one investment, it would depend on how liquid you want your funds and how much risk you are willing to take. Stocks are riskier and therefore give a higher expected return in the long term. Also it is important to take into consideration your stage in life, older folks, with little income, should stay conservative and stick to bonds, while younger people can assume more risk.
Actually the riskier the stock the larger the discount rather than a premium. The riskier a stock is the more likely it is that you could loose everything you have invested. It all comes down to the risk reward analysis. Investors must determine if the potential loss of a substantial amount of their investment is worth the reward if things work out in their favor. This determination will be based on each individuals risk tolerance. The riskier the stock becomes the less people will be willing to invest and it begins to effect the stock price resulting in that particular security trading at a discount to the market. Stocks with large potential can sell at a premium in the hopes that the potential will be realized. But, this is entirely different than a premium given based on the amount of risk. As percieved risk becomes greater stock prices decline.