A security is some representation of financial value. Bonds and stocks are examples of securities. The bond is the contract between the bondholder and the organization which describes how the money credited (invested) will be repayed with interest. Bondholders are creditors to an organization, whereas stockholders have an equity stake in an organization.
Resources and Quotes:
“A bond is a formal contract to repay borrowed money with interest at fixed intervals.”
http://en.wikipedia.org/wiki/Bond_(finance)
“…a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the principal at a later date, termed maturity.” http://en.wikipedia.org/wiki/Bond_(finance)
“A security is a fungible, negotiable instrument representing financial value. Securities are broadly categorized into debt securities (such as banknotes, bonds and debentures) and equity securities, e.g., common stocks; and derivative contracts, such as forwards, futures, options and swaps.” http://en.wikipedia.org/wiki/Security_(finance)
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