Question

fill in the blanks
fill in the blanks below with the terms stock(s), bond(s), index fund(s).

1. ____________ are loans from investors to companies, the government, or other financial institutions that must be repaid with interest.
2. instead of picking individual stocks, a better strategy is to invest in ____________ because it includes a mix of multiple stocks and helps you diversify.
3. when you purchase a ____________, you own a piece of that company and are willing to make or lose money based on how the stock price changes.

Explanation:

Step1: Analyze the first blank

Bonds are financial instruments where investors lend money to entities (companies, government, etc.) and the borrower repays with interest. So the first blank should be "Bonds".

Step2: Analyze the second blank

Index funds are a collection of multiple stocks, providing diversification instead of investing in individual stocks. So the second blank is "index funds".

Step3: Analyze the third blank

When you buy a stock, you own a share (a piece) of the company and your returns depend on the stock's price movement. So the third blank is "stock".

Answer:

1. Bonds
2. index funds
3. stock