All of the Following Represent Differences Between Stocks and Bonds

question 6

Multiple Choice

All of the following represent differences between stocks and bonds except

• A)a stock can possibly pay dividends forever, but bonds have a fixed number of payments.
• B)differences of opinion about a stock's future may vary considerably but there is less difference about a bond's future.
• C)the future growth of a stock is more uncertain than the payments of a bond.
• D)bonds represent partial ownership in a firm but stocks do not.

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Definitions:

First Welfare Theorem

An economic principle stating that under certain conditions, competitive markets (with no externalities) will lead to a Pareto efficient allocation of resources.

Pure Exchange Economy

An economic model where all agents are consumers, and the only economic activities are the consumption and exchange of goods, with no production.

Numeraire

A standard unit of account in which prices and values are expressed; it serves as a measure for comparing the worth of goods or services.

Endowed

Provided with a quality, ability, or asset.