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Bonds, Stocks, and Investments

1. What is the average return a person will usually earn off of bonds? How different is this than stocks?

2. Do you think that age of the investor is a factor as to what they should invest in?

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1) The average return a person usually earns on bonds has changed over time, depending on factors such as economic conditions. The type of bond also makes a difference in earnings. There are many different types of bonds. The returns on Treasury Bonds are not the same as returns on municipal bonds, or the returns of the bonds of emerging markets. In addition, a 10-year bond will give a different rate of return compared to a 30-year bond.

One way to gauge the earnings of bonds is to look at bond indexes. In general, 10-year US Treasury bonds give earnings of 2-3% while 30-year US Treasury bonds give earnings of 3-4%.

In general 10-year US bonds give earnings of 2-6%, while 30-year US bonds give earnings of 3-7%. Note that these bonds cover a wide variety, from Corporate (AAA) bonds to Corporate (BBB) bonds to taxable Municipal bonds. The risker bonds such as Corporate (BBB) as well as taxable ...

Solution Summary

Answered in 581 words. Four references are provided. An explanation of bonds and stocks is given. Justification is given for the answers.

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