How do stocks differ from a bond?

Stocks represent ownership in a company, giving shareholders a claim on its assets and earnings, while bonds are debt instruments where investors lend money to an entity (like a corporation or government) in exchange for periodic interest payments and the return of principal at maturity. Stocks can yield higher returns through capital appreciation and dividends, but they also carry higher risk and volatility. Bonds typically offer more stable returns and lower risk, but with potentially lower long-term gains compared to stocks. Ultimately, the main difference lies in ownership versus lending, and the associated risk-return profiles.