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 quarterly cash payments that are not guaranteed and vary over time. This corresponds to the definition of a dividend, which is a portion of a company's profits distributed to its shareholders on a regular basis. Therefore, D is the correct answer. Option premium refers to the price paid for an option contract, interest is a fixed payment for the use of borrowed money, capital gain is the profit earned from selling a valuable asset, and rebate is a partial refund of the cost of a product or service. None of these choices fit the description of James Green's expected payment.

James Green Just Bought a Security Which He Expects Will