Question

Bond payments are generally more predictable than stocks because:_______.
a. interest on bonds is not taxable.
b. stock prices and dividends exhibit little volatility.
c. bond owners know the size and timing of payments they will receive.
d. bonds generate higher average rates of return.

Answer 1

The bond payments are more predictable than stocks because bond owners know the size and timing of payments they will receive.

Bonds refers to the promise by a borrower to pay the lender his/her principal and the interest on the loan given.

• Bonds is an instrument used by company as an alternatives to taking a loan from banks.

• Generally, the bond payments are more predictable than stocks because bond owners know the size and timing of payments they will receive.

Therefore, the Option C is correct.

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