Financial Assets and Debt vs. Equity Quiz

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Questions and Answers

Match the following financial assets with their description:

Bond = Entitles the owner to the principle and interest specified Equity/Stock = Entitles the owner to dividends from the issuing company Debt = A liability for the company and a financial asset for the investor Equity = A share of ownership of the company and a financial asset for the owner

Match the following terms with their definitions:

Debt = When a company has borrowed money Equity = A share of ownership of the company Financial Instruments = Pieces of paper that are a claim on the issuing company Securities = Another term used to refer to financial assets

Match the following descriptions with the correct term:

Liability for the company and financial asset for the investor holding it = Debt Piece of paper entitling owner to dividends from issuing company = Equity/Stock Claim on the company issuing it, entitling owner to principle and interest = Bond Another term for financial assets issued by companies = Securities

Match the following terms with their role in finance:

<p>Bond = Entitles owner to interest payments Equity/Stock = Represents ownership in a company Debt = Represents borrowed money for a company Financial Assets = Claims on companies issuing them</p> Signup and view all the answers

Match the following concepts with their characteristics:

<p>Equity/Stock = Provides ownership stake in a company Liability for company, financial asset for holder = Debt Claim on issuing company, entitles to principle and interest = Bond Share of ownership, financial asset for owner = Equity</p> Signup and view all the answers

What does a bond entitle the owner to?

<p>Principle and interest specified on the bond (D)</p> Signup and view all the answers

Which term refers to a share of ownership of a company?

<p>Equity (B)</p> Signup and view all the answers

What is the main difference between Debt and Equity?

<p>Equity entitles the owner to dividends, debt does not (B)</p> Signup and view all the answers

How are financial assets sometimes collectively referred to?

<p>Securities (C)</p> Signup and view all the answers

For an investor, what does holding debt represent?

<p>A liability (D)</p> Signup and view all the answers

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