human
Can you explain the difference between a stock and a bond?
assistant
A stock is a type of security that signifies ownership in a company and represents a claim on part of the company’s assets and earnings. Investors are entitled to a share of the company’s profits in the form of dividends and they may also benefit from any rise in the value of the stock. A bond is another type of security and is typically issued by governments or corporations when they need to borrow money from investors. With a bond, an investor loans money to the issuer and is then entitled to receive regular interest payments until the bond matures, at which time the investor is repaid the full amount of the loan. Bonds tend to have a lower rate of return than stocks.