A passage with three blanks,followed by five options, each containingone word, is given. Choose the word thatcan fill all the three blanks.
In finance, a __________ is aninstrument of indebtedness of the issuerto the holders. The ___________ is adebt security, under which the issuerowes the holders a debt and is obligedto pay them interest (the coupon) or torepay the principal at a later date,termed the maturity date. Interest isusually payable at fixed intervals (semi-annual, annual, sometimes monthly).Very often it is negotiable, that is, theownership of the instrument can betransferred in the secondary market.This means that once the transferagents at the bank medallion stamp thesame, it is highly liquid on the secondarymarket. Thus, a __________ is a formof loan or IOU.
A passage with three blanks,followed by five options, each containingone word, is given. Choose the word thatcan fill all the three blanks.
In finance, a __________ is aninstrument of indebtedness of the issuerto the holders. The ___________ is adebt security, under which the issuerowes the holders a debt and is obligedto pay them interest (the coupon) or torepay the principal at a later date,termed the maturity date. Interest isusually payable at fixed intervals (semi-annual, annual, sometimes monthly).Very often it is negotiable, that is, theownership of the instrument can betransferred in the secondary market.This means that once the transferagents at the bank medallion stamp thesame, it is highly liquid on the secondarymarket. Thus, a __________ is a formof loan or IOU. Correct Answer Bond
‘Brand’ refers to a particular identity or image regarded as an asset. ‘Stock’ refers to the capital raised by a company or corporation through the issue and subscription of shares. ‘Bond’ is an interest-bearing security issued by governments, companies and some other organisations. ‘Barter’ refers to exchange (goods or services) for other goods or services without using money. ‘Bankruptcy’ means the state of being bankrupt. The given blanks can either use ‘bond’ or ‘stock’ as both are similar in meaning. Bonds and stocks are both securities, but the major difference between the two is that (capital) stockholders have an equity stake in a company (that is, they are owners), whereas bondholders have a creditor stake in the company (that is, they are lenders). Being a creditor, bondholders have priority over stockholders. Thus, ‘bond’ is the best fit word for the given blanks as it is clearly stated that it is a form of loan. This makes option 3 the correct answer.