Discuss the advantages and disadvantages of bonds and shares investment to an investor.
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Discuss the advantages and disadvantages of bonds and shares investment to an investor.
Discuss the advantages and disadvantages of bonds and shares investment to an investor.
Discuss the advantages and disadvantages of bonds and shares investment to an investor.
Bonds:Making a loan to a corporation
Bonds - Advantages:
1.Fixed return on investments - "coupon rate".
2.Higher in the creditors' hierarchy as compared to shareholder,lower risk of investment.
3.Although bonds may not perform as well as stocks over any period in which major market downturns do not occur,they are useful tools in their ability to hedge against market fluctuations and the normal ups and downs of the economy.
Bonds - Disadvantages:
1.Do not share in the company's profits.
2.There is interest rate,inflation and credit risk.Credit risk is the risk that the bond issuer will be unable to make its payments on time or at all,effectively defaulting on the bonds.
Shares:Buying part ownership in a corporation
Shares - Advantages:
1.Gain ownership and control in a corporation.
2.Share in the company's profits in terms of dividend payout or capital gain.
3.If you have a long time before retirement,stocks appear to have substantial advantages because there is more time for the market to correct any downturn that may cause a decrease in value of the stock.
Disadvantages of shares:
1.Potential total loss because the shareholders are at the bottom of the creditors' hierarchy,higher risk for investment.
2.The profit gain is more subject to market fluctuations,and dividends are not guaranteed.Stocks can drop in value and become worthless.
差不多就是这些了.你是要考Financial management吗,希望这个答案能帮到你.