Any securities representing a creditor relationship, whereby there is a fixed schedule for one or more future payments are called:

Question

Options

• AAdmitted assets
• BPolicy imbursement
• CYield amount
• DBonds

• A
  4% (1)
• B
  4% (1)
• C
  13% (3)
• D
  79% (19)

Explanation

Bonds are debt securities that represent a creditor relationship between the issuer (borrower) and the holder (lender), with a fixed schedule of future payments - typically periodic interest (coupon) payments plus return of principal at maturity. This matches the definition exactly.

Why the distractors are wrong:

• A. Admitted assets - these are assets an insurance company is legally allowed to count on its balance sheet for solvency purposes; unrelated to the creditor/payment-schedule concept.
• B. Policy imbursement - not a standard financial term; likely a distractor combining insurance policy language with reimbursement; doesn't describe a security at all.
• C. Yield amount - yield is a measure of return on an investment (e.g., percentage), not a type of security or instrument.

Memory tip: Think of Bonds as Borrowing - when a company or government issues a bond, they're borrowing from you and promising a fixed payment schedule in return. The word "creditor relationship" is the giveaway: you become their creditor, and bonds are the instrument that formalizes that.

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