Question

Securities that establish a debtor-creditor relationship in which the corporation borrows money from the investor to whom a debt security is issued are known as ________.

A) authorized shares
B) preferred stocks
C) common stocks
D) fixed income securities

Answer 1

Fixed-income securities are securities that establish a debtor-creditor relationship in which a corporation borrows money from an investor through debt security.

Step-by-step explanation:

The securities that establish a debtor-creditor relationship, in which the corporation borrows money from the investor and issues a debt security, are known as fixed-income securities.

Fixed-income securities include bonds, which are financial contracts where the borrower agrees to repay the borrowed amount and a rate of interest over time. These bonds are often issued by corporations, as well as various levels of government.

For example, municipal bonds are issued by cities, state bonds by U.S. states, and Treasury bonds by the federal government. Bonds specify the amount borrowed, the interest rate paid, and the repayment timeframe.