Answered: Why do people prefer bonds over stocks?…

Why do people prefer bonds over stocks? And why does the price of many individual stocks still go down, even when the overall stock market goes up?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 3MC

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Similar questions

why does the price of many individual stocks still go down, even when the overall stock market goes up?
why does the price of individual stocks still goes down despite the stock market going up
Even when the overall stock market goes up, why does the price of most individual stocks still go down?
Answer the following questions: A. Explain why the price of many individual stocks still goes down, even when the overall stock market goes up. b. How can you avoid the value of your stock from going down?
What are the most significant differences between stocks and bonds? A day would come when bonds would be a superior investment option than ordinary shares.
If you read in the Wall Street Journal that the “smartmoney” on Wall Street expects stock prices to fall,should you follow that lead and sell all your stocks?
How do stocks and bonds differ in terms of the future payments that they are expected to make? Which type of investment (stocks or bonds) is considered to be more risky? Given what you know, which investment (stocks or bonds) do you think commonly goes by the nickname “fixed income”?
Why do some investors prefer high-dividend-paying stocks?
What are the advantages and disadvantages of investing in the stock market vs the bond market?
Why do technical analysts look at the moving average of a company’s stock price, and why do they look at trend lines? (Did you know that technical analysis is used for bond investing too?)
What are efficient markets? Imagine if the price of a stock is going up and financial markets are efficient what can you tell us about the nature of the stock? What if the markets are inefficient then how would you react to increasing prices for a particular stock?
Preferred Stock and Bond Yields The yields on nonconvertible preferred stock are lower than the yields on corporate bonds. Why is there a difference? Which investors are the primary holders of preferred stock? Why?