Essentials of Economics 7th Edition by Gregory Mankiw

Exercise 9

Nina wants to buy and operate an ice-cream truck but doesn't have the financial resources to start the business. She borrows $5,000 from her friend Max, to whom she promises an interest rate of 7 percent, and gets another $10,000 from her friend David, to whom she promises a third of her profits. What best describes this situation?
A) Max is a stockholder, and Nina is a bondholder.
B) Max is a stockholder, and David is a bondholder.
C) David is a stockholder, and Nina is a bondholder.
D) David is a stockholder, and Max is a bondholder.