Which of the following is NOT a feature of a debt instrument?
A) A contractual claim against the borrower
B) Periodic interest payments
C) Higher claim on assets of borrower than equity holders
D) Their prices do not fluctuate as much as shares

Question

Quizplus · Accepted Answer

Debt instruments are known for their stability and security, which means they typically have lower volatility than equities. However, their prices do fluctuate based on various factors such as changes in interest rates or credit ratings, so D is not true. A, B, and C are all features commonly associated with debt instruments.

Which of the Following Is NOT a Feature of a Debt