It represents a claim on a share of the corporation's assets and earnings, if any. Historically, both volatility and long-term investment returns are highest for stocks. It represents a promise to repay the amount borrowed along with interest. Increasing inflation or rising interest rates reduce the value of bonds. Cash Cash refers to short-term investment instruments, most often debt securities with a maturity of one year or less, and often 30 days or less.
Cash includes typically safe, highly liquid investments.
Rates of return historically have been below those of stocks and bonds. 2000 Touchstone, all rights reserved.