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What is the difference between stocks and bonds

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Reference no: EM132810945

Question - You have an associate who is considering the purchase of corporate bonds. These bonds are currently selling at a premium. She states that because the bonds are selling at a premium they are highly valued and her investment will yield a higher than market return for the risk involved.

1. What is the difference between stocks and bonds?

2. What are bond premiums and discounts and how are they used in regards to bond pricing?

3. Do you agree with your associate that because the bonds in question are selling at a premium they are "highly valued"?

Reference no: EM132810945

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