Final answer:
A bond represents a loan to the issuer and pays fixed interest without conferring ownership, while a stock represents ownership in a company with potential dividends and voting rights. The correct answer to the differences between a bond and a stock is (d) All of the above.
Step-by-step explanation:
The primary differences between a bond and a stock can be summarized as follows:
- Ownership in a company: When you purchase a stock, you are buying a share of the company, making you a shareholder with partial ownership; bonds do not provide ownership, but rather a loan to the issuer.
- Fixed interest payments: Bonds typically pay fixed interest, known as coupon rates, to investors at regular intervals until maturity; stocks do not offer fixed payments but may provide dividends, which are profit distributions and not guaranteed.
- Voting rights: As a shareholder of a stock, you often have voting rights on corporate matters, whereas bondholders do not have any say in the company's affairs.
Therefore, the correct answer is (d) All of the above.