Securities that establish a debtor-creditor relationship in which the corporation borrows money from the investor to whom a debt security is issued are known as ________.

Question

Quizplus · Accepted Answer

The description matches that of fixed income securities, which include bonds, notes, and debentures. These types of securities represent debt obligations of the issuing corporation and offer a fixed rate of interest to the investor. The investor becomes a creditor of the corporation until the debt is repaid. A and B are incorrect because they refer to equity securities, and C does not establish a debtor-creditor relationship.

Securities That Establish a Debtor-Creditor Relationship in Which the Corporation