Which instrument is considered a security among the following?

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Multiple Choice

Which instrument is considered a security among the following?

Explanation:
The concept being tested is what qualifies as a security versus other financial instruments. A debenture is a debt security—an instrument that borrows money from investors with a promise to repay the principal plus interest. Because it represents an investment and is issued to raise capital, and it is tradable under securities laws, it is classified as a security. In contrast, collectibles are personal property driven by rarity or demand, currency is money used for exchange, and a fixed annuity is an insurance contract with guaranteed payments, not a security. (Note: variable annuities may involve securities, but a fixed annuity does not.)

The concept being tested is what qualifies as a security versus other financial instruments. A debenture is a debt security—an instrument that borrows money from investors with a promise to repay the principal plus interest. Because it represents an investment and is issued to raise capital, and it is tradable under securities laws, it is classified as a security. In contrast, collectibles are personal property driven by rarity or demand, currency is money used for exchange, and a fixed annuity is an insurance contract with guaranteed payments, not a security. (Note: variable annuities may involve securities, but a fixed annuity does not.)

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