what is the difference between a stock and a bond?

Answer 1

A stock is a share of a company, or a type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.

There are two main types of stock: common and preferred. Common stock usually entitles the owner to vote at shareholders' meetings and to receive dividends. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. For example, owners of preferred stock receive dividends before common shareholders and have priority in the event that a company goes bankrupt and is liquidated.

Also known as "shares" or "equity".

A bond is a debt investment with which the investor loans money to an entity (company or government) that borrows the funds for a defined period of time at a specified interest rate.

Stock = equity
Bond = debt

Answer 2

Difference Between Stocks And Bonds

Answer 3

Bonds are issued when a town (for example) wants to build a school and they don't have money to build it. Or if the gov wants to fight a war maybe. Many reasons for it, but they are safe and usually pay like 5% or so. Unless the town goes bankrupt, you gat paid back. Sometimes bond interest is even tax free. So 1 million invested, 50K per year TAX FREE.

Stocks are issued when a company starts out or grows to need more cash. They start with an IPO Initial Public Offering in which bankers and brokers and their best customers and friends usually make a killing, then the price levels off a bit. If you are lucky and picked well, the company does well, pays a dividend, and the stock price rises and you sell when its high. If you are not lucky, think Enron, Worldcom, etc. , the people running the comapny pay themselves millions per year while the company is going bankrupt, then they dump their stock by telling everyone, especially their employees to buy more stock , while they sell their own. Then the company goes bankrupt, the employees and investors loose all their investment.

Mostly you get an average of 12% a year historicly, it varies widely. Maybe but what you would buy, maybe just buy what Warren Buffett does.

Answer 4

A stock is an equity security wheras a bond is a debt security. Stock confers part ownership and a bond does not. A bond means the company or corporation owes you money, like a loan. In case of bankruptcy, bond holders get paid back first and stockholders last. Remember: yield on bonds has an inverse relationship with the interest rate and keep your P/E ratios real. PEACE!!!

Answer 5

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Penny stocks, also known as cent stocks in some countries, are common shares of small public companies that trade at low prices per share.
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Hope it helps.

Answer 6

This Site Might Help You.

RE:
what is the difference between a stock and a bond?

Answer 7

Stock is a security that involves paidup shares with maturities of over one year.

Bond may be compare to tressury bill that are only offered by the central bank.

Find more in Economics

Answer 8

A share of stock is a legal claim on the future profits of the firm, whereas a bond is a loan to the firm and entitles the holder to receive a fixed annual coupon payment and a lump-sum payment of principal at maturity

Answer 9

A stock is part ownership in a company, and is an EQUITY instrument.

A bond is a debt the company owes, and is a DEBT instrument.

If the company goes under, the debts get paid first, then the stock holders.

Answer 10

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