The difference between stocks and bonds in terms of the future payments that they are expected...

The difference between stocks and bonds in terms of the future payments that they are expected to make is

stocks pay fixed dividends, whereas bonds pay a variable amount of interest at regular intervals.
stocks pay dividends out of profits, whereas bonds pay a predetermined amount of interest at regular intervals.
bonds pay fixed dividends out of revenues, whereas stocks pay a variable amount of interest at regular intervals.
bonds pay dividends out of profits, whereas stocks pay a predetermined amount of interest at regular intervals.

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Expert Solution

Answer- Correct option is 'B'

The difference between stocks and bonds in terms of the future payments that they are expected to make is stocks pay dividends out of profits, whereas bonds pay a predetermined amount of interest at regular intervals.

The difference between stocks and bonds is that stocks are shares in the ownership of a business while bond are a form of debt that issuing entity promises to repay at some point in the future.

Stocks pay dividends out of profits, dividends represent the distribution of corporate profits to shareholders, based upon the number of shares held in the company. Shareholders expect the companies that they invest in to return profits to them, but not all companies pay dividends.

Bonds pay a predetermined amount of interest at regular intervals, thus by purchasing a bond, an investor loans money for a fixed period of time at a predetermined interest rate.

Rahul Sunny answered 1 year ago

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