A direct equity claim arises through investment in:
A)bonds and other debt instruments.
B)common stocks, warrants, and options.
C)preferred stock and commodity futures.
D)mutual funds.
E)None of the above

Question

Quizplus · Accepted Answer

Direct equity claims arise through ownership of common stocks, warrants, and options, as they represent ownership in a company and a share in its profits and losses. Bonds and debt instruments provide fixed income and do not confer ownership rights. Preferred stock is a hybrid security that has characteristics of both equity and debt, but it does not provide the same level of ownership rights as common stock. Commodity futures and mutual funds also do not confer direct ownership in a specific company.

A Direct Equity Claim Arises Through Investment In