Which statement is correct about debt instruments?
A)A contract whose value changes according to a specified variable.
B)A contract that gives the holder the residual interest in an entity.
C)A contract that gives the holder joint interest in an entity.
D)A contract that is not an equity instrument or a derivative.

Question

Quizplus · Accepted Answer

Debt instruments refer to contracts that are not equity instruments or derivatives. Equity instruments represent ownership in a company, while debt instruments represent borrowed money that must be repaid with interest over time. Derivatives are contracts whose value is derived from an underlying asset or index. Therefore, the correct answer is D.

Which Statement Is Correct About Debt Instruments