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    Stocks or Bonds Over Time Periods

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    Are stocks or bonds better investments over:

    -A one-year period? Explain your reasoning.

    -A five-year period? Explain your reasoning.

    -A twenty-five year period? Explain your reasoning.

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    Solution Preview

    Financing assets or getting a return depends on the type of assets you are trying to finance and the time frame in which you need your return. Financing assets is typically through debt (loans/bonds) or through equity (stocks) or cash generated from the asset purchased. Therefore, to determine if the stock or bond is a better investment within a one, five, or twenty-five year period simply depends on what asset you are purchasing AND the amount of time you want to receive a return.

    In a one-year period, people or companies understand they are investing in a short-term market in which the stocks or bonds ...

    Solution Summary

    This solution explains if stocks or bonds are the better investment over a one-year period, a five-year period, and a twenty-five year period, explaining the reasoning behind each statement.