ECONOMICS (CBSE/UGC NET)

ECONOMICS

FINANCIAL MARKETS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which of the following cannot be called as a debt instrument as referred to in financial transactions?
A
Certificate of deposit
B
Bonds
C
Stocks
D
Loans
Explanation: 

Detailed explanation-1: -Debt instruments are the assets that require a fixed payment with interest to the holder. Its examples include mortgages and bonds (corporate or government). Stocks cannot be called a Debt instrument.

Detailed explanation-2: -Debt instruments are assets that require a fixed payment to the holder, usually with interest. Examples of debt instruments include bonds (government or corporate) and mortgages.

Detailed explanation-3: -A vehicle that is classified as debt may be deemed a debt instrument. These range from traditional forms of debt including loans and credit cards, and fixed-income assets such as bonds and other securities.

Detailed explanation-4: -Detailed Solution: Stocks are not a debt instrument. All others like Debentures, Bonds, Mortgages and Promissory note are all debt instrument.

Detailed explanation-5: -Debt instruments are divided into long-term instruments which include debentures, bonds, long-term loans from financial institutions, GDRs from foreign investors, and short-term instruments, which include working capital loans, and short-term loans from financial instruments.

There is 1 question to complete.