What is a stock?

A stock represents ownership in a company through shares, which can be bought or sold on various markets. When an individual purchases stock, they are essentially buying a small piece of that company, which can come with potential financial benefits such as dividends and appreciation in value. Stocks are fundamental components of financial markets, allowing companies to raise capital for growth and expansion by selling ownership stakes to investors.

Other options do not accurately define what a stock is. Debts owed by the company refer to liabilities, not ownership equity. A physical asset owned by a business would typically fall under fixed assets or inventory, not stocks. Lastly, a corporate bond is a form of debt security issued by companies, representing a loan made by an investor to the issuer, which is also distinct from owning stock in a company.