Question

Why is a high-quality bond typically considered a lower-risk investment than a stock?

AA bond typically pays a fixed, predictable amount of interest each year.
BWell-established company stocks pay dividends to their investors.
CStocks are stable and do not change often.
DBonds are issued by many different entities .

Answer 1

I think the answer is choice A. A high-quality bond is typically considered a lower-risk investment than a stock because bond typically pays a fixed, predictable amount of interest each year. This is unlike to stocks which can provide higher returns but usually have fluctuating prices throughout the year and is thus riskier.