Answer :

GinnyAnswer

Final answer:

Investors choose low-interest-rate bonds due to interest rate expectations, opportunity cost, and potential capital appreciation.


Explanation:

Investors may choose to invest in bonds with low interest rates due to various reasons:

  • Interest Rate Expectations: When investors anticipate interest rates to rise, they may opt for bonds with low interest rates since bond prices are inversely related to interest rates.
  • Opportunity Cost: Holding money instead of bonds when interest rates are low can be advantageous as the opportunity cost of holding money decreases.
  • Capital Appreciation: Investors may foresee capital appreciation in long-term bonds if interest rates are expected to fall, leading them to pay more upfront.

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barbaramarie510

Answer:

The returns are more consistent and reliable

Explanation:

Bonds typically have lower yields, but the returns are more consistent and reliable over a number of years than stocks, making them appealing to some investors. Stocks may provide greater returns than bonds but the risk of loss is just as high.

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