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To complete a sentence about financial securities.
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The question asks to complete a sentence about financial securities.
- A financial security that represents an ownership interest in a corporation is known as corporate stock. A bond, on the other hand, represents a debt.
- Corporate stock, representing ownership, is considered an equity security. A debt security represents a loan.
Therefore, the completed sentence should be: "The type of financial security that represents an ownership interest in a corporation is known as corporate stock. This type of security is considered to be an equity security."
Let's check the options:
- a bond / an equity (Incorrect, bond is not ownership)
- a bond / a debt (Incorrect, bond is debt, but not ownership)
- corporate stock / an equity (Correct, corporate stock is ownership and is an equity security)
- corporate stock / a debt (Incorrect, corporate stock is not a debt security)
The final answer is
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