Which of the following is an example of an ownership investment?
(1 point)
Responses
stocks
stocks
bonds
bonds
money market funds
money market funds
savings accounts
Stocks are an example of an ownership investment. When you purchase stocks, you're buying a share of ownership in a company, which means you become one of the many owners of the company. As a shareholder, you have a claim on the company's assets and profits, which can potentially grow over time if the company does well. Additionally, you may receive dividends as a form of income from the profits of the company.
The other options listed:
- Bonds are considered a debt investment rather than an ownership investment. When you purchase a bond, you are lending money to a government or corporation in exchange for periodic interest payments and the return of the bond's face value when it matures.
- Money market funds are a type of mutual fund that invests in short-term, high-quality debt from governments, banks, or corporations. They are considered cash investments and do not convey ownership.
- Savings accounts are financial accounts held at a bank or other financial institution that pay a small amount of interest. They represent a loan to the bank and are categorized as cash investments rather than ownership investments.