bonds

     A bond is not just a different name for a share of stock. A share of stock, remember, is a part ownership in a corporation. A bond is like a promissory note--the person who buys the bond has loaned money to the corporation, which has promised to pay it back at a certain time, with a certain amount of interest. The stockholders have borrowed money from the bondholders. People buy and resell bonds much the way they do stock--they hope to get more for them than they paid for them. The closer the bonds are to "maturity"--to the date when they will be paid back with interest--the more someone is likely to pay for them.  A share of stock may last as long as the corporation that issued it is still in business--but a bond "matures"--and so has an eventual end, when the bearer of the bond is paid. When a corporation is liquidated--for any reason--bondholders are paid before stockholders--who are actually paying their debts before finding out how much their assets are worth.