Question

How do stocks and bonds differ?

Stocks are good for income while bonds are good for long-term growth.


Stocks may help you protect your money from inflation while bonds may be more susceptible to losing their value over time due to inflation.


Stocks are loans you give out to corporations and get paid back with interest; bonds are shares of a company that you own.


Stocks are low risk while bonds are high risk.

Answer 1

The correct answer is letter "B": Stocks may help you protect your money from inflation while bonds may be more susceptible to losing their value over time due to inflation.

Step-by-step explanation:

Stocks are high-risk investments that can provide profits overnight or can swipe investors' accounts in a matter of seconds. When it comes to inflation, they do not have to deal too much with it. On the other hand, bonds are less risky, almost safe investment vehicles that give investors profits based on the fixed interest rate that the bond pays and is collected by year. Inflation erodes the purchasing power of bonds.