Question

Which of these statements is false? Bonds are always less risky than stocks. The bond market is larger than the stock market. Some bonds offer high potential for rewards and, consequently, higher risk. Bonds are more important capital sources than stocks for companies and governments.

Answer 1

• The bond market is subsequently larger than the stock market. as only corporations issue stocks, bonds are issued by both corporations and the government.
• The stock market is perceived to be more risky than the bond market. the stock market provides long term return and is favorable to those who an tolerate the short term risks.
• bonds are an important source of capital for both government and corporations, whereas the stocks are an important source of capital for only the corporations, as only the corporations issues stocks.  
• the higher the risk , the higher will be the return. the stocks are more risky investment, they provide higher returns, on the other hand bonds provide less returns but stable returns over a period of time.

the correct option is option 3 is false. the statement 3 mentioned in the problem is a false statement.