Which of the following does not constitute a feature of a debt security?

Question

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A debt security represents a loan that the holder has made to the issuer, and does not give the holder any ownership interest in the firm. Option A and D are both features of a debt security, as the principle is repaid at a fixed time and the return is fixed for the life of the security. Option B is also a feature of a debt security, as the holders have priority claim against the assets of the firm in case of liquidation. Option C, however, is not a feature of a debt security, as it is associated with equity securities such as common stock, where the holder has an ownership interest in the company.

Which of the Following Does Not Constitute a Feature of a Debt