QuestionWhich money saving option represents ownership? Annuities Commodities Bonds Stocks
Studdy Solution
STEP 1
1. We are considering common financial instruments and their characteristics.
2. We need to determine which option represents ownership.
STEP 2
1. Define each financial instrument.
2. Determine the characteristics of ownership.
3. Identify which instrument aligns with ownership characteristics.
STEP 3
Define Annuities: An annuity is a financial product that provides a series of payments made at equal intervals. It is typically used for retirement income and does not represent ownership in a company or asset.
STEP 4
Define Commodities: Commodities are basic goods used in commerce that are interchangeable with other goods of the same type. They do not represent ownership in a company or asset.
STEP 5
Define Bonds: Bonds are fixed income instruments that represent a loan made by an investor to a borrower. They do not represent ownership in a company; instead, they are a form of debt.
STEP 6
Define Stocks: Stocks represent ownership in a company. When you own a stock, you own a piece of the company, which may entitle you to a portion of the company's profits and assets.
STEP 7
Ownership Characteristics: Ownership implies having a stake or share in an entity, which may include rights to profits, dividends, and voting rights in company decisions.
STEP 8
Stocks align with ownership characteristics because they represent a share in a company, providing rights to profits and voting in company matters.
The financial instrument that represents ownership is:
Was this helpful?
