Financial Industry Regulatory Authority (FINRA) Practice Exam 2025 - Free FINRA Practice Questions and Study Guide

The correct answer is stock, as it represents ownership in a corporation. When an individual buys stock, they acquire a share in the company, which entitles them to a portion of the company’s assets and earnings. This ownership is typically evidenced by a stock certificate or electronic record. Shareholders may also have voting rights, allowing them to participate in key company decisions such as the election of the board of directors.

Bonds, on the other hand, are debt instruments. When an individual purchases a bond, they are effectively lending money to the issuer (usually a corporation or government) in exchange for interest payments and the return of the bond's face value at maturity.

A mutual fund is an investment vehicle that pools funds from many investors to purchase a diversified portfolio of stocks, bonds, or other securities. While investors in a mutual fund have some ownership rights in the underlying assets, they do not hold direct ownership of the fund's individual investments.

Options are financial derivatives that give the holder the right but not the obligation to buy or sell an underlying asset at a predetermined price before a specified date. They do not convey ownership of the underlying asset but rather a contractual right related to it.

Thus, stock distinctly represents ownership in a corporation, making it the