Which of the following ‘cannot’ be called as a debt instrument as referred in the financial transactions?

Dear Imran ali Mohammad,

 

I agree with Subhranshu Ganguly’s answer;   Stock is considered as an equity instrument.

 

Commercial Papers - An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities. Maturities on commercial paper rarely range any longer than270 days. The debt is usually issued at a discount, reflecting prevailing market interest rates.

 

Stock -  A type of security that signifies ownership in a corporation and represents a claim on a part of the corporation's assets and earnings. (for more information please check: http://www.investopedia.com)

 

Certificate of deposit -  a savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC. The term of a CD generally ranges from one month to five years.

 

 

Bond Is a debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the found for a definite period of time at a valuable or fixed interest rate. Bonds are used by companies, municipalities, states, and sovereign governments to raise money and finance a variety of projects and activities.

 

Debenture - A type of debt instrument that is not secured by physical assets or collateral. Debentures are backed only by the general creditworthiness and reputation of the issuer. Both corporations and governments frequently issue this type of bond in order to secure capital.

 

I think this answer will help you. Please correct me if anything wrong from my side.

 

 

Sir .According to me stocks cannot be a debt instrument as it is an equity instrument. A debt instrument is less risky as it has a fixed rate of return. An equity instrument is more volatile as its value varies with the market. 

Suffice duties colleagues

 

thanks for the invitation

Mr. Shamsheer KM, I think none of the options are the answer, as all the options mentioned can be termed as 'Debt Instrument. Its only 'LOAN' which 'Cannot' be termed as debt instrument.

 

Note : Please correct me, if I'am wrong. Thnz.

Commercial Papers are not Debt Instruments

The answer of your question is letter A, because CD is a savings certificate which is entitling the bearer to recieve interest.