Question: Stocks and Bonds The financial sector has an important role in bringing together people with savings to invest, and companies or...

Question:

1.  Stocks and Bonds

The financial sector has an important role in bringing together people with savings to invest, and companies or governments that need to borrow funds. Let's assume you have $10 to invest.  Will you invest in a stock or a bond?  What are the risks to you that are associated with investing it in stocks versus bonds?

2. Confidence

The NPR podcast describes some banks' recent manipulation of the LIBOR interest rate. Confidence is crucial for our banking system to function effectively. How would uncertaintly about banks' behavior affect your decision to invest in stocks and bonds?  What is the role for banking regulation?