Which of the following is a hybrid security?
A) Preferred stock.
B) Futures.
C) Treasury bonds.
D) Call options.
E) Common stock.

Question

Quizplus · Accepted Answer

Preferred stock is a hybrid security as it possesses characteristics of both equity and debt. Preferred shareholders have a fixed dividend rate like debt holders and have priority over common shareholders in receiving dividends and in the event of liquidation. However, they also have certain equity-like features such as the potential for capital appreciation and voting rights in some cases. Futures, Treasury bonds, call options, and common stock are not considered hybrid securities.

Which of the Following Is a Hybrid Security