Question

Which of the following best defines a Debenture?

A A redeemable preference share with cumulative dividend rights Correct Answer Incorrect Answer
B A tradable certificate of ownership in mutual fund schemes Correct Answer Incorrect Answer
C A long-term borrowing instrument issued by a corporation, with or without collateral Correct Answer Incorrect Answer
D A short-term promissory note issued by the Reserve Bank of India Correct Answer Incorrect Answer
E An equity-linked security traded on derivatives exchanges Correct Answer Incorrect Answer

Solution

Debentures are long-term debt instruments used by companies to raise funds, either secured or unsecured, usually with a fixed interest.

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