Question

Which of the following is TRUE of debt securities? (A) Debt securities include preferred stocks. (B) Debt securities typically pay interest for a fixed period. (C) Debt securities entitle the holder to receipt of a share of profit in the form of dividends. (D) Debt securities represent ownership interests of the investors.

Answer 1

Answer:

The statement which is correct and true is that the debt securities usually pay interest for the fixed period or year. Therefore, the correct option is B.

Explanation:

Debt securities are the securities which refer to a debt instrument like CD (Certificate of deposit, preferred stock, corporate bond and municipal bond, it is sold or bought among the parties.

It is also called as the securities which are fixed income, therefore, the statement which is correct is that these securities pay interest for a fixed period.