The most commonly used claim in financial markets is
A)debt, which is a claim to share in the profits and assets of a firm.
B)debt, which requires the borrower to repay the principal of the loan plus interest.
C)equity, which is a claim to share in the profits and assets of a firm.
D)equity, which requires the borrower to repay the principal of the loan plus interest.

Question

Quizplus · Accepted Answer

Debt is a financial claim that obligates the borrower to repay the borrowed amount (principal) along with interest over a specified period, distinguishing it from equity, which involves ownership shares in a company without a requirement to repay a specific amount.

The Most Commonly Used Claim in Financial Markets Is