A stock is an obligation issued by a corporation that promises the holder to receive fixed annual interest payments and payment of the principal upon maturity.

Question

Quizplus · Accepted Answer

The definition given in the statement refers more to a bond than a stock. A stock represents ownership in a corporation and can provide dividends, but there is no promise of fixed interest payments or repayment of the principal investment.

A Stock Is an Obligation Issued by a Corporation That