Delariait® Gabriel C. ‘Supangan, Franchozsa Marie B. ‘11- ABM C St. Timothy December 12, 2022 General Mathematics - Performance Task 3 STOCKS The investor is a part-owner An Equity Instrument that represents an ownership interest in a corporation Cervir Profits will be earned through dividends Risk Level High Risk, High Potential Return More volatile ea malt) Preferred by investors with a long-term investment horizon and a tolerance for short-term risk =" WHY INVEST - STOCKS? investors the best potential h (capital appreciation) ong haul. latively lower risk because are prioritized for payment. * Shareholders have the power to vote for management changes if the company is mismanaged. Ss BOND o > The investor is the creditor Meaning ‘A Debt Instrument that guarantees repayment of the principal amount plus interest Profits will be earned through interest Risk Level Low Risk, Low Potential Return —— Characteristics More stable Tu Lack the powerful long-term return potential of stocks, but are preferred by Investors who want to increase their income WHY INVEST BONDS? * Bonds offer legal protection. If a company goes bankrupt, __ its bondholders will often receive some money back, whereas the company's equity stock often ends up valueless. * It is often liquid and fairly easy for a business to sell a large quantity of bonds without affecting the price much. * The volatility of bonds is lower than bonds are as safer that of stocks; thus, generally viewed investments than stocks. * Bonds offer high interest rates. * They provide a predictable income stream. WHY INVEST IN BOTH? * Despite having generally offered lower long-term returns than stocks, bonds are typically more stable. Your portfolio will be expanded when owning a variety of such investments. By doing this, you can reduce the risks that come with investing all of your money in one particular kind of security. ee 7 Compara nck iB (209 Rie et aha We hp leer ck bold T_T 2 .> P seouasapoy