8
QuizMultiple Choice

Stocks vs. Bonds

Question 8 • 26-27 Ignite Financial Literacy Personal Finance - EL3403

Which of the following statements is true?

Answer
A
Bonds have more risk than stocks, but offer more return.
B
Stocks have more risk than bonds, but offer more return.
C
Stocks tend to offer a greater risk, while bonds tend to offer a greater return.
D
Bonds tend to offer a greater risk, while bonds tend to offer a greater return.

Explanation

Stocks generally involve more risk than bonds because their prices can fluctuate more and stockholders are paid after bondholders if a company fails. In return for taking on that risk, stocks tend to offer greater potential returns. So the true statement is “Stocks have more risk than bonds, but offer more return.”

AI-written and checked against the verified answer.

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