Debt securities promise _________.
I.a fixed stream of income
II.a stream of income that is determined according to a specific formula
III.a share in the profits of the issuing entity

Question

Quizplus · Accepted Answer

Debt securities, such as bonds, promise a fixed stream of income (I) or a stream of income that is determined according to a specific formula (II), such as an adjustable-rate bond tied to a benchmark interest rate. However, they do not offer a share in the profits of the issuing entity (III), which is primarily associated with equity securities. Therefore, the best choice is B, which includes both options I and II.

Debt Securities Promise _________