Which of the following is true for bonds but not for stocks? A. Bonds are the least liquid form of assets. B. Bonds earn variable rates of return. C. Bonds represent partial ownership in a company. D. Bonds are interest-bearing assets. E. Bonds have zero opportunity cost.
Advanced Placement (AP) · Middle School · Tue Nov 03 2020
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D. Bonds are interest-bearing assets.
This statement is true for bonds but not for stocks. Bonds represent debt, and when an investor buys a bond, they are essentially lending money to the issuer (which could be a government or a corporation). In return for lending the money, the bondholder receives periodic interest payments from the issuer. This interest feature distinguishes bonds from stocks, where ownership in a company does not typically involve regular interest payments. Stocks may provide returns through dividends and capital appreciation, but they do not have the fixed interest payments characteristic of bonds.