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).