Which of the following differentiates a corporate bond from a consumer loan?

The correct choice highlights that a consumer loan is not traded on a public market, which is a significant distinction between corporate bonds and consumer loans.

Corporate bonds are debt securities issued by companies to raise capital, and they are often traded on public exchanges. This allows investors to buy and sell these bonds in secondary markets, providing liquidity and price discovery based on market conditions.

On the other hand, consumer loans, such as personal loans or mortgages, are typically agreements between an individual and a financial institution. These loans are not traded on public markets; rather, they are held by the issuing bank or institutions and repaid over time by the borrower. This lack of a public trading platform for consumer loans restricts their liquidity compared to corporate bonds, making the distinction clear.

Understanding this difference is essential for recognizing how various debt instruments function in the financial markets and the implications for investors and borrowers alike. The other options either misrepresent the nature of corporate bonds and consumer loans or do not accurately capture the key differences between these financial instruments.