What are the primary differences between a bond and
a stock?
The primary differences between a bond and a stock are:
1. Ownership: A bond is a debt instrument, meaning the investor is lending money to the issuer, while a stock represents ownership in a company.
2. Risk: Bonds are generally considered to be less risky than stocks, as the issuer is obligated to pay the investor back with interest. Stocks, on the other hand, can be more volatile and the value of the stock can go up or down depending on the performance of the company.
3. Return: Bonds typically offer a fixed rate of return, while stocks can offer both dividend payments and capital gains.
4. Maturity: Bonds have a fixed maturity date, while stocks do not.