Whats the difference between a stock and a bond?

Whats the difference between a stock and a bond?

Sure, here's the difference between a stock and a bond:

Stocks

  • Stocks are ownership interests in a company.
  • When you buy a stock, you are essentially becoming a part-owner of that company.
  • Stocks represent a claim on the company's future earnings and profits.
  • Stocks can be bought and sold on stock exchanges.
  • Stocks are typically traded on a stock exchange, such as the New York Stock Exchange (NYSE) or the London Stock Exchange (LSE).

Bonds

  • Bonds are debt securities issued by a company or government.
  • When you buy a bond, you are lending money to the issuer for a specified period of time.
  • In return for your loan, the issuer agrees to pay you interest payments and return the principal amount of the bond when it matures.
  • Bonds are typically issued at a fixed interest rate, or coupon rate.
  • Bonds can be bought and sold on secondary markets.
  • Bonds are typically traded on a bond exchange, such as the New York Mercantile Exchange (NYMEX) or the Chicago Mercantile Exchange (CME).
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