Which term means to buy back something previously issued?

• A. to penalize
• B. to extinguish
• C. to renew
• D. to redeem

Answer: (D)

Redeem is the term for buying back a security that was issued earlier. When an issuer redeems a bond or other instrument, it repays the principal to the holder and cancels the debt obligation. This can happen at maturity or earlier if the issuer has a call feature, sometimes with a small premium. The other actions don’t fit this specific idea: to penalize is about punishment, not repurchasing financial instruments; to extinguish means to end or wipe out, but not the act of buying back issued securities; to renew suggests starting again or extending something, not reclaiming a previously issued instrument. So redeem is the precise term for buying back what was issued.