What is the difference between stocks and bonds?
Stocks (aka Equities): Stocks represent partial ownership of a corporation. If the corporation does well, its value increases, and you share in the appreciation. However, if the corporation goes bankrupt, you can lose your entire initial investment.
Bonds (aka Notes): Bonds represent a loan you make to a corporation or government. For example, you can buy a US Treasury bond for $100, and get a guaranteed interest rate for 5-years, and can expect to get your $100 back at the end of that 5-years plus interest. Your risk is repayment of the principal (amount invested). Because loaning $100 to the U.S. government is much less risky than loaning $100 to the Brazilian government, U.S. government bonds pay a much lower rate of interest ("coupon") for borrowing your money. Stocks and Bonds .... How do they differ Stocks are EQUITY. They represent shares of ownership in a Corporation. A Stockholder is actually one of many owners of a Publicly Owned Corporation. If a Corporation dissolves for any reason owners of Common Stock (the main type of stock issued) receive the value of the sold assets of the Corporation AFTER everyone else is paid, including the IRS, Employees, Bonds, Accounts Payable, etc.
Bonds are DEBT. They are sold by the Corporation in order to raise money for various purposes for use by the company. Bonds offer an interest rate to the Bondholder for the period of time that the Bondholder owns the bonds.
Since bonds do not represent ownership, the bondholder could lose their investment if the Corporation dissolves, but are paid BEFORE owners of stock.
When you buy either bonds or stock, you pay money now with the possibility of getting more money later. But a bond represents a debt--the company that issued the bond owes you money to be paid when the bond is redeemed. A stock represents ownership. As a stockholder, you become a part owner of the company.
Stocks, compared to bonds, have which of the following characteristics?(Apex)-----
A. No guarantees
The major difference between stocks and mutual funds is that stocks are an investment in a single, individual company, while mutual funds are made up of many stocks and are typically managed by a broker. Mutual funds are generally considered safer investments than stocks, as they reduce the risk of lost, but also reduce the chance of gain.
The difference between strength and hardness is that the strength refers to the force that is present between the bonds. Strength attributes to how strong or weak the force between the bonds. Hardness refers to the nature of the force, which basically is how rigid or flexible the bonds between particles.
Do ionic bonds have a greater or lesser electronegativity difference between them than a covalent bond?
What is the basic difference in how the prices for stocks are displayed in financial pages versus the way the prices for bonds are shown?
Ionic Bonds-form when two atoms have a large difference in electronegativity. Covalent Bonds-form when two atoms have a very small difference in electronegativity. Polar Covalent Bonds- form when two elements bond with a moderate difference in electronegativity. Fall between ionic and covalent. Metallic Bonds-form in and between metals
Bonds and stocks serve different purposes to the investor, and ideally you should buy both. Advantage of investment-grade bonds: the issuer is committed to paying you a stated amount of money on a stated date. The disadvantage is your return is limited to the agreed-on amount. Advantage of stocks: potentially unlimited return on your investment. The disadvantage is there are no guaranteed returns with stocks; you could potentially lose everything you invested in them. Speculative-grade…
Held for trade securities are stocks and bonds that are held with intention of selling in order to generate profits. Therefore there will be a selling price and all unrealized gains and losses are reported on the income statement. The Available for Sale securities are bonds and stocks that are sold with no intention of profit and all unrealized gains and losses are included in Other Comprehensive Income. Both need yearly fair value adjustments.
There is one government agency - Security and Exchange Commission (SEC) and two Self Regulating Organizations (SROs) who mandate or administer regulations for stocks and bonds: NASD (They recently changed the name to FINRA) and MSRB. * SEC regulates stocks, treasury securities, and municipal bonds * FINRA administers regulations by SEC for Over The Counter stocks (e.g., the stocks traded on NASDQ). * MSRB administers regulations by SEC in relations to Municipal Stocks. * Corporate…
In the financial world, more risk equals more return. Less risk equals less return. That is why you see Greece right now paying very high yields on their bonds (it is very risky to invest in a Greek bond right now because they could possibly default). If you buy a basket of 10 risky stocks, and then buy a basket of 10 low-risk stocks, the risky stocks will usually outperform the less risky stocks.