Equity is to debt as:

The relationship between equity and debt can be understood by looking at their fundamental differences and how they function in the financial markets. Equity represents ownership in a company, typically through common or preferred stock, whereas debt represents a loan or obligation, such as bonds, that the company must repay.

Stock is a form of equity, giving investors ownership stakes in a company, allowing them to benefit from its profits and growth. On the other hand, bonds are a form of debt, where investors lend money to the issuer in exchange for periodic interest payments and the return of the principal at maturity. This direct comparison clarifies the distinction between equity (ownership) and debt (loan).

The other options do not maintain this clear ownership versus obligation distinction. For instance, stock compared to a mutual fund does not align as clearly with the equity-debt relationship because a mutual fund holds various equity and debt securities, making it a broader investment vehicle rather than a direct comparison. Similarly, comparing hedge funds to mutual funds involves different strategies and structures rather than a simple equity versus debt framework. Finally, stock versus preferred stock is still within the equity category and does not represent a debt component, making it a less relevant comparison in this context.