In the context of investments in securities, money invested is usually used to do which of the following?

• A. Distribute dividends to shareholders
• B. Purchase financial assets such as stocks or bonds
• C. Pay off existing company debts
• D. Cover daily operating expenses

Answer: (B)

Verified step by step guidance

1. Understand the concept of investments in securities: Investments in securities refer to the allocation of money into financial assets such as stocks, bonds, or other instruments with the expectation of earning returns over time.
2. Analyze the options provided: The question asks what money invested in securities is typically used for. Review each option carefully to determine its relevance to the concept of securities investments.
3. Option 1: Distribute dividends to shareholders. Dividends are payments made to shareholders from a company's profits, not directly related to the act of investing in securities.
4. Option 3: Pay off existing company debts. Paying off debts is a financial management activity, not the primary purpose of investing in securities.
5. Option 4: Cover daily operating expenses. Operating expenses are part of a company's day-to-day activities and are not typically funded through investments in securities. The correct purpose is to purchase financial assets such as stocks or bonds, as these are the instruments involved in securities investments.