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What is the difference between a stock and a bond?
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The primary difference between a stock and a bond is that stocks represent an ownership stake in a company, while bonds are effectively IOUs from a company or other issuer. When you purchase a stock, you become a partial owner of the company and are entitled to a portion of their profits and assets. When you purchase a bond, you are lending money to the company, and in return, you receive a fixed rate of interest on the loan amount.