Final answer:
Shares of common stock are often referred to as equities because they represent ownership in a company. Common stock represents an ownership stake in the company and entitles the shareholder to a portion of the company's profits.
Step-by-step explanation:
Shares of common stock are often referred to as equities because they represent ownership in a company. When you buy a share of common stock, you become a shareholder and have a claim on a portion of the company's ownership and profits. Unlike bonds or debentures, which represent debt obligations, common stock represents an ownership stake in the company. Securities are a broader term that includes both stocks and bonds, so the correct answer is C) Equities.Since each share of common stock represents ownership in a company, shares of common stock are often referred to as C) Equities. The term equities is commonly used because shareholders hold equity in the company, essentially having a claim on a portion of the company's assets and earnings.
The other terms, such as securities, bonds, and debentures, all represent different financial instruments. For instance, 'A) Securities' is a broad term that could include equities but also refers to other tradable financial assets, 'B) Bonds' are a type of debt investment where the investor loans money to an entity, and 'D) Debentures' are a type of bond or other debt instrument that is unsecured by collateral.