What is the difference between a bond and a stock?

A bond is a type of debt security issued by a company or government, while a stock represents ownership in a company. When an investor buys a bond, they are essentially loaning money to the issuer, who promises to pay back the principal amount with interest. In contrast, when an investor buys a stock, they are buying a share of ownership in the company, which entitles them to a portion of the company's profits and assets. Bondholders do not have ownership rights in the issuer and typically receive a fixed return on their investment, while stockholders have the potential to earn a greater return if the company's stock price increases but also bear the risk of potential losses.