Types of bonds and shares

Question

Accepted Answer

Bonds and shares are types of financial instruments used by companies to raise capital from investors.

Bonds are debt securities where investors lend money to a company or government in exchange for periodic interest payments and the return of the principal amount at maturity.
Shares, also known as stocks, represent ownership in a company and entitle the shareholder to a portion of the company's profits through dividends and potential capital appreciation.
Bonds have a fixed maturity date, while shares do not have a maturity date and can be held indefinitely.
Bonds are generally considered less risky than shares, as bondholders have a higher claim on the company's assets in case of bankruptcy.
Examples of bonds include government bonds, corporate bonds, and municipal bonds. Examples of shares include common stock and preferred stock.

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