A security that represents part ownership of a company is called a(n) ________________.

Enhance your financial literacy with the Canfield Personal Finance Exam. Test your knowledge with multiple choice questions designed to challenge your understanding of money management, budgeting, investing, and more. Prepare thoroughly to excel in your exam.

A security that represents part ownership of a company is referred to as "stock." When individuals purchase stock, they acquire shares of the company, which entitles them to a portion of the company's profits and assets, as well as voting rights in certain corporate decisions. Stocks are a fundamental component of the equity markets and serve as a way for companies to raise capital by selling ownership stakes to investors.

In contrast, a certificate of deposit is a time deposit offered by banks with a fixed interest rate, a bond represents a loan made by an investor to a borrower (typically a corporation or government), and an annuity is a financial product that pays out a fixed stream of income over a specified time period, usually used for retirement planning. Each of these options serves a different financial purpose and does not convey ownership in a company like stock does.

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