If Stocks Are More Risky Than Bonds, Why Would a Rational

question 81

Essay

If stocks are more risky than bonds, why would a rational investor ever buy stocks?

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Definitions:

Consumption

The act of using goods and services for personal needs or satisfaction, often analyzed in economics to understand spending patterns and behaviors.

Marginal Social Benefit

The additional benefit to society as a whole from producing one more unit of a good or service.

Individual Marginal Benefits

The additional satisfaction or utility that an individual gains from consuming one more unit of a good or service.

Consumer

An individual or group that purchases goods or services for personal use.