A form of debt or equity that possesses characteristics of both debt and equity financing is called ________.
A) hybrid security
B) convertible security
C) derivative security
D) cumulative security

Question

Quizplus · Accepted Answer

A hybrid security is a form of financing that possesses features of both debt and equity. For example, a hybrid security may have a fixed interest rate and maturity date like debt, but also allow investors to convert their investments into equity under certain conditions. Other examples of hybrid securities include preferred stock and convertible bonds.

A Form of Debt or Equity That Possesses Characteristics of Both