Which term describes a debt instrument issued by a borrower that promises to repay with interest?

• A. Real estate
• B. Commodities
• C. Bonds
• D. Collectibles

Answer: (C)

A debt instrument that promises to repay with interest is a bond. When a borrower such as a government or a company needs money, it issues a bond, and investors lend money by buying it. In return, the issuer agrees to make periodic interest payments (coupons) and to repay the principal amount when the bond matures. This structure makes bonds a formal obligation of debt, not equity or ownership.

Real estate, commodities, and collectibles are categories of assets or goods, not debt instruments. Real estate is property; commodities are tradable goods like oil or gold; collectibles are items valued for rarity or desirability. None of these by themselves obligate the issuer to repay a loan with interest in the way a bond does.