Stock
A share of ownership in a corporation, whose value rises and falls with the business, so both the risk and the expected return run higher than on debt.
Issuing stock is how a corporation raises equity, and buying a share in a secondary market makes the buyer one of that business's owners.
Often confused with
- Bond
- A stock makes you a part owner with no promised payment; a bond makes you a lender with scheduled interest.
Taught in
See also
3.5.B.4 · 3.5.C.1 · 5.3.B.1 · 5.3.B.3