Which of the following is an example of an investment in securities?

• A. Buying office supplies for daily use
• B. Purchasing shares of common stock in another company
• C. Paying employee salaries
• D. Repaying a bank loan

Answer: (B)

Verified step by step guidance

1. Understand the concept of 'investment in securities': Investments in securities refer to the purchase of financial instruments like stocks, bonds, or other marketable securities with the intention of earning a return or holding them for strategic purposes.
2. Analyze each option provided in the problem: Determine whether each option involves the purchase of a financial instrument or security.
3. Option 1: Buying office supplies for daily use - This is an operational expense and does not involve purchasing financial instruments, so it is not an investment in securities.
4. Option 2: Purchasing shares of common stock in another company - Shares of common stock are financial instruments, and purchasing them qualifies as an investment in securities.
5. Option 3: Paying employee salaries and Option 4: Repaying a bank loan - Both are operational or financing activities and do not involve purchasing financial instruments, so they are not investments in securities.