Types of Securities (Shares, Bonds, Debentures) MCQs September 11, 2025 by u930973931_answers 50 Score: 0 Attempted: 0/50 Subscribe 1. Which of the following is NOT considered a security? (A) Shares (B) Bonds (C) Debentures (D) Currency notes 2. Equity shares are also called: (A) Ordinary shares (B) Preference shares (C) Treasury bills (D) Commercial papers 3. Which type of share provides fixed dividends? (A) Equity shares (B) Preference shares (C) Bonus shares (D) Rights shares 4. Shareholders of equity shares are also known as: (A) Creditors of company (B) Owners of company (C) Lenders of company (D) Bondholders 5. Bonds are generally issued by: (A) Individuals (B) Governments and corporations (C) Employees (D) Shareholders 6. A debenture is essentially a: (A) Loan certificate issued by a company (B) Share with voting rights (C) Dividend declaration (D) Currency note 7. Which security carries the highest risk but also highest return? (A) Bonds (B) Debentures (C) Equity shares (D) Preference shares 8. Which security usually carries fixed interest payments? (A) Equity shares (B) Preference shares (C) Bonds and debentures (D) Rights shares 9. Shareholders are rewarded through: (A) Dividends (B) Interest (C) Commission (D) Capital gains only 10. Bondholders are considered as: (A) Owners of company (B) Creditors of company (C) Partners of company (D) Directors of company 11. Which of the following securities has voting rights? (A) Equity shares (B) Bonds (C) Debentures (D) Preference shares 12. Which security provides priority in payment of dividends? (A) Equity shares (B) Preference shares (C) Bonds (D) Debentures 13. Convertible debentures can be converted into: (A) Bonds (B) Equity shares (C) Preference shares (D) Treasury bills 14. Non-convertible debentures: (A) Cannot be changed into shares (B) Always convert into equity (C) Always provide voting rights (D) Are government securities 15. Which of the following is a short-term security? (A) Commercial paper (B) Bonds (C) Equity shares (D) Debentures 16. Zero-coupon bonds are issued at: (A) Premium (B) Discount (C) Face value only (D) Dividend value 17. Preference shareholders have priority over equity shareholders in: (A) Voting rights (B) Dividend payments (C) Management control (D) Bonus shares 18. Secured debentures are backed by: (A) Companyâs goodwill (B) Companyâs assets (C) Government guarantees (D) Shareholdersâ equity 19. Unsecured debentures are also called: (A) Mortgage debentures (B) Naked debentures (C) Convertible debentures (D) Bonus debentures 20. Which of the following securities is least risky? (A) Equity shares (B) Preference shares (C) Corporate bonds (D) Government bonds 21. Bonus shares are issued from: (A) Company reserves (B) Borrowed funds (C) Government treasury (D) Shareholdersâ loans 22. Rights shares are offered to: (A) General public (B) Government only (C) Existing shareholders (D) Employees only 23. Callable bonds allow: (A) Investors to demand repayment anytime (B) Issuers to redeem bonds before maturity (C) Conversion into equity (D) Priority in dividend 24. Puttable bonds allow: (A) Issuer to force redemption (B) Investor to sell bond back before maturity (C) Conversion into shares (D) Fixed dividend rights 25. Hybrid securities include: (A) Equity only (B) Preference shares with debt features (C) Currency notes (D) Government treasury bills 26. Shareholders are residual claimants because: (A) They are paid last after creditors (B) They receive fixed interest (C) They are government employees (D) They manage the company directly 27. Bonds usually have a maturity period of: (A) Short-term only (B) Medium to long-term (C) Intraday (D) Unlimited period 28. Equity shareholders bear: (A) Limited risk (B) Fixed income (C) Maximum risk and reward (D) No ownership rights 29. Debenture holders receive: (A) Dividends (B) Interest (C) Bonus shares (D) Rights shares 30. Preference shares are sometimes called: (A) Fixed income shares (B) Growth shares (C) Convertible shares (D) Naked shares 31. Government bonds are also known as: (A) Gilts (B) Blue-chip shares (C) Naked debentures (D) Hybrid securities 32. The return on bonds is called: (A) Dividend (B) Interest (C) Profit share (D) Bonus 33. The return on shares is called: (A) Dividend (B) Interest (C) Rent (D) Commission 34. Which security provides ownership and control rights? (A) Bonds (B) Debentures (C) Equity shares (D) Preference shares 35. Which security is suitable for risk-averse investors? (A) Equity shares (B) Government bonds (C) Debentures (D) Preference shares 36. Cumulative preference shares mean: (A) Dividend accumulates if not paid in a year (B) Dividend is paid only once (C) Shares are converted into debentures (D) They provide voting rights 37. Non-cumulative preference shares mean: (A) No dividend is carried forward (B) Dividend accumulates every year (C) Convertible into equity (D) Issued by government 38. Participating preference shares allow holders to: (A) Share in extra profits (B) Force redemption (C) Convert into debentures (D) Avoid risks 39. Bonds are generally considered as: (A) Debt instruments (B) Equity instruments (C) Hybrid instruments (D) Informal securities 40. Shares are generally considered as: (A) Ownership instruments (B) Loan instruments (C) Hybrid securities (D) Treasury bills 41. Debentures are issued mainly by: (A) Corporations (B) Government (C) Consumers (D) Stock exchanges 42. Which type of shares can be issued at a discount or premium? (A) Equity shares (B) Bonds (C) Debentures (D) Treasury bills 43. Bonds that pay interest linked to inflation are called: (A) Fixed-rate bonds (B) Floating-rate bonds (C) Indexed bonds (D) Naked bonds 44. Debentures that can be redeemed after a fixed period are called: (A) Irredeemable debentures (B) Redeemable debentures (C) Convertible debentures (D) Secured debentures 45. Shares issued free of cost to existing shareholders are: (A) Rights shares (B) Bonus shares (C) Preference shares (D) Convertible shares 46. Which type of bond does not pay periodic interest? (A) Zero-coupon bond (B) Floating-rate bond (C) Convertible bond (D) Indexed bond 47. A shareholder who buys shares for capital appreciation expects: (A) Increase in share price (B) Fixed dividend (C) Fixed interest (D) Debt repayment 48. Secured debentures are less risky because: (A) Backed by company assets (B) Convertible into equity (C) Issued at premium (D) Tax-free 49. Which type of security gives no ownership rights? (A) Bonds (B) Equity shares (C) Ordinary shares (D) Bonus shares 50. Which type of investors prefer debentures? (A) Risk takers (B) Risk-averse (C) Speculators (D) Entrepreneurs