9
InstructionMultiple Choice

Stocks vs. Bonds

Question 9 • ****Spring 2026 Financial Math - MA2007 MQS21QXV

Why does the government issue only bonds, while companies issue both stocks and bonds?

Answer
A
The US government does not involve itself in the stock market because it does not want to risk losing money if there should ever be a crash in the stock market.
B
Because the stock market is used as a form of gambling, the government refuses to associated itself with the stock market as a way to discourage gambling.
C
Stock in a company gives the holder part-ownership of the company, with voting rights on big decisions, and profits when the value goes up. The people already vote on happenings in the government and inherently have ownership of the government.
D
A stock is a part ownership in a company, and the leaders of the government won’t have the people owning the government.

Explanation

A stock represents partial ownership of an organization and may give shareholders voting rights and a claim on profits. A company can sell shares because it has owners; a government is not structured as a company with shares to sell. Citizens participate in government through voting and are often described as having a stake in it, while bonds let governments borrow money without selling ownership. Choice C best expresses this distinction.

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