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Chapter 17: Q.4 (page 425)

Which has a higher average return over time: stocks, bonds, or a savings account? Explain your answer.

Short Answer

Expert verified

Stocks have further volatility with them

Step by step solution

01

Step 1. Definition

A stock is a security that constitutes the power of a part of a company.
Bondsarecorridorofcommercialdebtissuedbycompanies.
A savings regard is an interest-grounded deposit account at a bank or other fiscal institution.

02

Step 2. Explanation

Inlongtermamongstocks,bonds, savings accountsstockshaveanadvancedreturnascomparedtobondsand savingsaccounts.
This is because in any given time the savings regard changes veritably little and in bonds, there's a threat factor that's included.
But stocks have further volatility with them as stocks involve lesser threat but with the occasion of lesser return.

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