Equity Synonyms | CTFA Exam: Certified Trust and Financial Advisor

Equity Synonyms

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Question

Which of the following term is used synonymously for the equity?

Answers

Explanations

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A. B. C. D.

A

The correct answer is A. Share.

Equity refers to the ownership interest in a company or property. It represents the residual value of assets after liabilities are deducted. Equity holders are entitled to a portion of the company's profits and assets in the event of a liquidation.

A share is a unit of ownership in a corporation or mutual fund. When an investor purchases a share, they become a part-owner of the company, entitled to a portion of its earnings and assets. The terms "share" and "equity" are often used interchangeably.

Distributions, sections, and divisions do not refer to ownership interests in a company or property and are not synonymous with equity.

Distributions refer to payments made to shareholders from a company's earnings or profits.

Sections and divisions can refer to different parts of a company or organization, but they do not necessarily have any ownership implications.