A distinction between stocks and bonds is that
A) bonds must be held for a fixed number of years whereas stocks can be bought and sold at any time.
B) stocks represent ownership claims to the company and bonds do not.
C) although the return on a bond is determined by the forces of supply and demand, the return on a stock is set by the stock exchange.
D) bonds cannot be sold to anyone other than the company that issued it while stocks can be resold to anyone.
E) bonds can be traded many times in the bond market, while stocks are non-transferable.

Question

Quizplus · Accepted Answer

Stocks represent ownership in a company, giving shareholders voting rights and a claim on company profits through dividends. Bonds, on the other hand, are a form of debt where the investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period at a variable or fixed interest rate.

A Distinction Between Stocks and Bonds Is That