Common Stock
What type of security represents ownership in a corporation?
Stock = Ownership (equity). Bond = Loan (debt).
Complete Analysis & Legal Rationale
Common stock represents ownership (equity) in a corporation. Stockholders are part-owners of the company and have voting rights. Bonds are debt instruments where the holder is a creditor, not an owner.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Corporate bonds are debt securities - bondholders are creditors, not owners.
Matches the verified teaching point in the explanation.
Municipal bonds are debt issued by state/local governments, not ownership.
Treasury bills are short-term government debt, not ownership.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.