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Comparison of corporate stock and/or bonds

Short and precise answers will be more suitable for comparison

1) What are the primary differences between investments in corporate stock versus corporate bond?
2) Since bonds pay interest, does that imply the individual's risk is less for investing in bonds rather than stock?
3) What are the mechanics of purchasing bonds? May the investor leave the bonds with his or her broker?
4) Since a bond has a maturity date, does that imply the investor holds the bond to maturity?
5) Can the investor expect to earn higher returns on a firm's bonds than on its stock?
6) Are high -yield securities an acceptable investment for an investment club or its members?
7) From a tax perspective. Which should an investor acquire for a retirement account: a firm stock or its bonds?
8) If an individual owns stock and acquires bonds issued by the same company, does the purchase diversify the investor's portfolio?
9) How does an individual construct a diversified bond portfolio? How can an investor uses bonds to help diversity the total portfolio?

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1) What are the primary differences between investments in corporate stock versus corporate bonds? The difference between being an investor versus a debtor has to do with safety and rate of return. A debtor expects a reasonable rate of return on funds lent to a corporation whereas the investor looks to share in future profits in terms of appreciation and dividends.

2) Since bonds pay interest, does that imply the individual's risk is less for investing in bonds rather than stock? Yes, it is a reasonable assumption that debt is less risky than stock investment, and that fact is proved in bankruptcy. Bonds are preferential to common stockholders in liquidation. Trading in bonds tends to move in a narrower range than equities too.

3) What are the mechanics of purchasing bonds? May the investor leave the bonds with his or her broker? Buying bonds is very similar to buying equities and can be left on deposit with the broker as ...

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The 500+ word solution presents comprehensive explanations of the questions including expanded responses for understanding regarding comparisons between corporate stock and corporate bonds.

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