Which Statement Is TRUE Regarding Various Instruments in Financial Markets

question 48

Multiple Choice

Which statement is TRUE regarding various instruments in financial markets?

• A) Compared with bonds, stocks provide equity and higher risk.
• B) Compared with bonds, stocks provide higher risk and lower returns.
• C) Compared with bonds, stocks provide lower risk and higher returns.
• D) Compared with bonds, stocks provide less equity and lower risk.

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Definitions:

Inefficient Use

The scenario where resources are not employed in the best possible manner, leading to wastage or suboptimal outcomes.

Wasteful Use

The inefficient or excessive consumption of resources without providing proportionate benefits.

Shortsightedness Effect

The tendency of decision-makers to prioritize short-term gains and benefits over long-term consequences, often resulting in adverse outcomes.

Political Action

Engagement in activities intended to influence public policy and leadership, ranging from voting to participating in demonstrations or lobbying efforts.