An attribute of an equity instrument is that:
A) the holder is entitled to a fixed-rate return.
B) the holder is not entitled to a fixed-rate return.
C) it always confers voting rights upon the holder.
D) it is always issued at par value.

Question

Quizplus · Accepted Answer

An equity instrument represents ownership in a company and does not provide the holder with a fixed-rate return. Instead, the return on equity comes from increases in the value of the company's assets or profits. Equity instruments may or may not confer voting rights upon the holder, and they can be issued at a price other than par value.

An Attribute of an Equity Instrument Is That