SSC Economics Sample Paper NCERT Sample Paper-6

  • question_answer
    Equity market instruments help in financing a firm. Which of these is/are equity market instruments?
    1. Bonds
    3. Debentures
    Select the correct answer using the codes given below.

    A)  1 and 2 only    

    B)  2 only

    C)  2 and 3 only

    D)  1, 2 and 3

    Correct Answer: B

    Solution :

    [b] 2 only. Shares are equity instruments, while bonds and debentures are debt instruments. Debt instruments are assets that require a fixed payment to the holder, usually with interest. Examples of debt instruments include bonds (government or corporate), debentures and mortgages. Equity financing allows a company to acquire funds (often for investment) without incurring debt, eg. shares.

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