Question

Question: What is the main difference between a bond and a share of stock?

Short answer

Answer

A bond is a written promise to pay a certain amount as stated in the contract. In contrast, the stock is the ownership certificaterepresenting the investor's share in the company.

Step-by-step solution

Meaning of Bond

A bond refers to a written document or instrument issued by a company to raise funds. In return, a company is liable to pay back the principal amount and the timely interest payments.

Difference between a bond and a share of stock 

Basis	Bonds	Stock
Meaning	A bond is a written agreement to pay the bondholders the bond’s face value on the maturity date of payment and interest at a stated contract rate for each period.	Stock is the individual's share in the holding of the corporation.
Investment	A bond is a loan investment, which means an investor is loaning money to an entity	Stock, on the other hand, is an own investment. An investor who purchases stock owns a part of that company.
Nature	When an investor buys a bond, the bondholder gives money as a loan in the form of a bond to a company in exchange for regular interest payments.	When an individual purchases a stock, he's buying ownership in a company.