186k views
1 vote
Why is a high quality bond typically a lower risk investment then a stock?

User Jens Erat
by
6.8k points

1 Answer

3 votes
Stocks are only issued by corporations, whereas bonds can be issued by either corporations or government entities. Bonds pay interest which is guaranteed, unless the company or government entity goes bankrupt, whereas stocks have more risk associated.
User Econoclast
by
6.2k points