Your friend told you that she invested $1,000 in a portfolio of large-company stocks 5 years ago and also reinvested the dividends. Her investment grew to $3,456 as at today. Had she invested that same amount in a Government of Grenada bond she would have received $2,500 even if she reinvested the 10 percent coupons paid on the bonds. Given this information, critically discuss why anyone would want to invest in bonds rather than stocks? Further explain why the price of many individual stocks still go down, even when the overall stock market goes up. How can you avoid the value of your stock from going down?
