Question

There are two basic types of investment certificates, _________ that establish that the investor is owed something by the corporation and _________ that establish that the investor owns some portion of the corporation.

A) Preferred stock; Common stock
B) Bonds; Stocks
C) Stocks; Debentures
D) Treasury bills; Preferred stock

Answer 1

Preferred stock and common stock are the two basic types of investment certificates.

Step-by-step explanation:

The two basic types of investment certificates are preferred stock and common stock.

Preferred stock establishes that the investor is owed something by the corporation. It gives investors priority rights to receive dividends and assets in the event of liquidation.

Common stock establishes that the investor owns some portion of the corporation. Common stockholders have voting rights and may receive dividends, but they are last in line to receive assets in the event of liquidation.