Which of the following is a characteristic of a bond?

A bond is fundamentally a debt instrument, which means it is essentially a loan made by an investor to a borrower, typically a corporation or government. When an entity issues a bond, it is borrowing money from investors and agreeing to pay interest on that loan at a specified rate and return the principal amount at maturity. This characteristic differentiates bonds from stocks, which represent ownership in a company.

Bonds typically do not confer ownership rights, which is why the alternative options do not correctly describe a bond. They do not offer variable dividends since they typically pay fixed interest payments, and while regulatory oversight can vary, bonds generally do not fall under the same level of regulation as stocks, particularly in terms of reporting and disclosure requirements. However, the essential nature of a bond as a loan is what makes option B the correct answer.