Module 03 Discussion – Stocks vs. Bonds

my initial discussion post

Discuss three commonalities between stocks and bonds. Discuss threedifferences. If you were a business owner, would you prefer to issuestocks or bonds to raise money? Why? If you were an investor, would youprefer to own stocks or bonds? Why?

and two student replys:

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module 3 discussion

Post:

module 3 discussion

Author:

Anthony Parker

Posted Date:

November 24, 2020 8:05 PM

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The biggest similarity between stocks and bonds is that both ofthem are financial securities sold to investors to raise money. With stocks,the company sells a part of itself in exchange for cash. With bonds,the entity gets a loan from the investor and pays it back with interest..Stocks are risky and volatile but can provide high long-term returns.Bonds tend to be low-risk and low-reward, with someexceptions. Stocks represent ownership in a company,while bonds represent debt. Stocks provide the owner with voting rightsin a company, while bondholders have no voting rights.When companies want to raise capital, they can issuestocks or bonds. Bond financing is often less expensive than equityand does not entail giving up any control of the company. Bonds haveseveral advantages over bank loans and can be structured in many wayswith different maturities. Stocks and bonds are often inverselycorrelated, meaning that when stocks go down, bonds go up.These mixedstock and bond portfolios are usually rebalanced regularly, such as onceper quarter or once per year.

Thread:

Stocks vs. Bonds

Post:

Stocks vs. Bonds

Author:

Cheyenne Stuttley

Posted Date:

November 24, 2020 11:50 PM

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One commonality between stocks and bonds is that oncepurchased, both have the potential to gain profit. Stocks and bonds areboth sold by a company in order to raise money from investors. Thebiggest difference between the two is how they generate prfoit. In orderto profit from a stock, it must gain value and later be sold on thestock market. However, bonds pay a fixed interest over time. Stocks areshares of a company and a person because a part-owner of the businessonce purchased. Bonds are a loan to a business and must eventually bepaid back with interest. Stocks are sold by a company, where as, bondscan be sold by a company, a city, or the government.

If I were a business owner, I would prefer to issue stocks.This way I am gaining money by investors but make no promises to paythem back. If I sold bonds, I would have to pay the money back whethermy business was successful or not. If I were an investor, I would preferto own stocks. Even though it is riskier and profit is not guaranteed,there is usually a higher return through stocks.

Rasmussen. (2020). Module 3 savings and investments [lesson content]. Retrieved from https://learning.rasmussen.edu/ultra/courses/_77368_1/cl/outline

Carney, J. (2019, July 01). Pros and Cons to Internal Promotion vs. External Hiring. Retrieved November 25, 2020, from https://hrdailyadvisor.blr.com/2019/07/01/pros-and-cons-to-internal-promotion-vs-external-hiring/

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Module 03 Course Project – Savings and Investment Presentation

For this part of the course project, you will demonstrate the best use of savings and investment processes.

In your role as a financial advisor at Eagle Consulting, you will bemeeting a potential customer, Keith Jones. Mr. Jones is 35 years old,married with two children, and would like your help in planning along-term investment strategy with the $100,000 he has to invest. Inadvance of your meeting, you decide to create a PowerPoint presentationthat will educate Mr. Jones on how stocks and bonds are valued, as wellas provide a guide to stock and bond investing.

To complete this assignment, do the following:

1. Refer to the Eagle Consulting Info Sheet you downloaded in the first part of this course project
2. Develop a 10-screen PowerPoint presentation with accompanying lecture notes that explains the following concepts:
   1. Bond valuation techniques
   2. Stock valuation techniques
   3. Comparison of stock and bond investing

The presentation should include the following slides and accompanyinglecture notes. The slide content should be brief and include supportingimages or diagrams where appropriate. Use the Notes area beneath eachslide to put the accompanying lecture notes for the slide.

Slide

Content

1

Title Slide

2

Slide Content: List of primary benefits of stock investing

Lecture Notes (100-150 words)

• Explain each identified benefit.

3

Slide Content: List of primary risks of stock investing

Lecture Notes (100-150 words):

• Explain each identified risk.

4

Slide Content: List of primary benefits of bond investing

Lecture Notes (100-150 words)

• Explain each identified benefit.

5

Slide Content: List of primary risks of bond investing

Lecture Notes (100-150 words):

• Explain each identified risk.

6

Slide Content: Explanation of bond valuation techniques

Lecture Notes (100-150 words):

• Discuss the importance for investors of understanding bond valuation techniques.

7

Slide Content: Step-by-step example of a bond valuation technique using numbers

Lecture Notes (100-150 words):

• Explain the bond valuation technique.
• Explain how changing the variables in the example may change the value of the bond.

8

Slide Content: Explanation of one stock valuation technique

Lecture Notes (100-150 words):

• Discuss the importance for investors of understanding stock valuation techniques.

9

Slide Content: Step-by-step example of the stock valuation technique using numbers

Lecture Notes (100-150 words):

• Explain the stock valuation technique.
• Explain how changing the variables in the example may change the value of the stock.

10

Slide Content: Recommended portfolio of stocks and bonds for Mr. Jones’s situation

Lecture Notes (100-150 words):

• Explain the reasoning behind this recommendation.