What is a key characteristic of stocks?

The key characteristic of stocks is that they signify ownership in a corporation. When an individual buys stock, they are purchasing a share of the company, which means they own a piece of that company. This ownership is reflected in the representation of shares which can appreciate in value and may provide dividends to shareholders depending on the company’s performance and policies.

In contrast, loans to a company pertain to bonds, not stocks, as bonds represent debt rather than ownership. Stocks do not promise fixed interest payments; rather, dividends are not guaranteed and can fluctuate based on the company's profitability. Additionally, stocks are generally considered long-term investments, while short-term financial instruments, like treasury bills or commercial paper, typically have maturities of less than one year, distinguishing them from stocks.