It is paid based on its redemption value. Select the correct response: Stocks or Bonds.
Understand the Problem
The question is asking which financial instrument is paid based on its redemption value, suggesting a choice between stocks and bonds. The correct response relates to the nature of these instruments, focusing on how they are paid at maturity or redemption.
Answer
Bonds
The final answer is Bonds.
Answer for screen readers
The final answer is Bonds.
More Information
Bonds have a redemption value, which is the amount paid back to the investor when the bond matures. Stocks do not have a redemption value; their value fluctuates and depends on market conditions.
Tips
A common mistake is confusing stocks with bonds. Stocks represent ownership and fluctuate based on the market, while bonds are fixed-income investments with a predetermined redemption value.
Sources
- 4 Basic Things to Know About Bonds - Investopedia - investopedia.com
- It is paid based on its redemption value. Select the correct response ... - gauthmath.com
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