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Typically, ______________papers bearing the promise of a future stream of monetary returns over a certain period of time.
Question

Typically, ______________papers bearing the promise of a future stream of monetary returns over a certain period of time.

A.

Deposits

B.

Securities

C.

Bonds

D.

Capitals

Correct option is B

The correct answer is (b) Securities

Explanation:

•       Securities are financial instruments that represent an investment and a promise of future financial returns.

•       They include equity (stocks), debt instruments (bonds), and derivatives, all of which are backed by the issuer’s promise to pay returns over time.

•       Securities are tradable and are often used by companies and governments to raise capital.

•       They are typically documented on paper or in electronic form and promise future cash flows to the investor.

Information Booster:

•       The term "security" encompasses both ownership (like shares) and creditor relationships (like bonds).

•       Securities can be classified into debt securities, equity securities, and derivative instruments.

•       Examples include Treasury bills, government bonds, corporate bonds, stocks, etc.

Additional Knowledge:

Deposits (Option a)

•       Generally refer to funds placed in banks for safekeeping and interest earning.

•       Not tradable securities and not referred to as "papers" in the investment context.

Bonds (Option c)

•       Are a type of security representing debt.

•       While they fit the definition, the term “securities” is broader and includes bonds.

Capitals (Option d)

•       Refers to wealth or assets available for use or investment.

•       Not a financial instrument itself, hence doesn't match the question’s description.

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