An attribute of an equity instrument is:
A. That the holder is entitled to a fixed-rate return.
B. That the holder is not entitled to a fixed-rate return.
C. That it always confers voting rights upon the holder.
D. That it is always issued at par value.
E. None of the given answers.

Question

Quizplus · Accepted Answer

Equity instruments, such as stocks, do not entitle the holder to a fixed-rate return. Instead, the return on equity investments is based on the performance of the company and can vary over time. Equity instruments also do not always confer voting rights, and they are not necessarily issued at par value. Therefore, option B is the correct answer.

An Attribute of an Equity Instrument Is