James Green just bought a security which he expects will provide him with a quarterly cash payment,although that payment is not guaranteed.In fact,he expects the amount of the payment to vary over time.What type of payment is he expecting to receive?

Question

Quizplus · Accepted Answer

James Green is expecting to receive a payment that is not guaranteed and varies over time, which is consistent with a dividend payment from a stock. Option premium is a payment made for the option to buy or sell a security, interest is a fixed payment for borrowed money, capital gain is a profit from the sale of an investment, and rebate is a refund of a portion of a payment made. None of these options fit the description of what James Green is expecting to receive.

James Green Just Bought a Security Which He Expects Will