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When you buy a ____ , you are loaning money to an organization a) Stock b) Bond c) Mutual fund d) Index fund

The correct answer is B (bond). When you buy a bond, you are loaning your money to an organization.

Explanation:

Bonds usually have an end date, which is when the entity that received the loan must pay it back with interest.

Due to their temporary nature, bonds are used by organizations that are in need of cash to finance operations, such as private companies, municipalities, and local governments.

Man holds dollars (cash) in his hands.
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Besides bonds, there are various types of investments that could be made by individuals. Buying stock means making an investment into a particular company and earning a part of its shares.

Stock investments are riskier than bonds but can earn a higher interest rate.

Funds are also a common investment tool where several investors pool money together and buy various stock or bonds to share the profits later.

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Academic.Tips. (2022, March 29). When you buy a ____ , you are loaning money to an organization a) Stock b) Bond c) Mutual fund d) Index fund. https://academic.tips/question/when-you-buy-you-are-loaning-money-to-an-organization/

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Academic.Tips. 2022. "When you buy a ____ , you are loaning money to an organization a) Stock b) Bond c) Mutual fund d) Index fund." March 29, 2022. https://academic.tips/question/when-you-buy-you-are-loaning-money-to-an-organization/.

1. Academic.Tips. "When you buy a ____ , you are loaning money to an organization a) Stock b) Bond c) Mutual fund d) Index fund." March 29, 2022. https://academic.tips/question/when-you-buy-you-are-loaning-money-to-an-organization/.


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Academic.Tips. "When you buy a ____ , you are loaning money to an organization a) Stock b) Bond c) Mutual fund d) Index fund." March 29, 2022. https://academic.tips/question/when-you-buy-you-are-loaning-money-to-an-organization/.

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"When you buy a ____ , you are loaning money to an organization a) Stock b) Bond c) Mutual fund d) Index fund." Academic.Tips, 29 Mar. 2022, academic.tips/question/when-you-buy-you-are-loaning-money-to-an-organization/.

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