Which of the following is a similarity between shares and bonds?

• A. Dividends are paid to both
• B. Both are issued by the government
• C. Transferrable securities
• D. Both represent ownership in the company

Answer: (C)

Shares and bonds both fall under the category of financial instruments known as transferable securities. This means they can be bought and sold in the market, allowing investors to transfer ownership of these instruments from one party to another. The key similarity here lies in their ability to be traded, which provides liquidity to investors.

In contrast, dividends are only associated with shares, as they represent a portion of a company's earnings distributed to shareholders. Bonds, on the other hand, involve interest payments rather than dividends. While it is true that both shares and bonds can be issued by various entities, including governments and corporations, it is not accurate to say that both are exclusively issued by the government. Furthermore, shares represent ownership in a company, whereas bonds represent debt, making that statement incorrect in the context of ownership.