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The type of instrument whoever holds it, gets the interest and principal amount is classified as ___________?

Correct answer: B. bearer instrument

  • A. term instrument
  • B. bearer instrument
  • C. primary instrument
  • D. interim instrument

Explanation

A bearer instrument belongs to whoever physically holds it, so the holder is entitled to receive its interest and principal. Ownership does not need to be recorded in the issuer’s name.

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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.

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