To analyze: The main differences between a bond and a stock.
Explanation of Solution
In order to fund or extend its activities, stocks and bonds represent two separate ways for an organisation to raise capital.
A bond is a fixed income asset representing a loan made to a borrower by a lender. Bonds are units of debt issued and securitized as tradable assets by businesses. Bonds reflect debts. When a company or business issues a bond, it issues debt with the conformity of paying the interest for using the money.
Whereas, a stock is a general word used to describe a company's ownership certificate. Stocks are literally individual company shares. When a business issues stocks, it sells a piece of itself in return for cash.
Chapter 6 Solutions
Economics Today and Tomorrow, Student Edition
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