Questions: What is the key characteristic that makes preferred stock behave more like debt than equity? Market price fluctuations. Fixed dividend payments. Voting rights. Conversion options.

The answer is the second one: Fixed dividend payments.

Explanation for each option:

1. Market price fluctuations: This is not a key characteristic that makes preferred stock behave more like debt. Both equity and debt can experience market price fluctuations, but this does not inherently make preferred stock similar to debt.

2. Fixed dividend payments: This is the correct answer. Preferred stock often pays fixed dividends, similar to the fixed interest payments on debt. This characteristic makes preferred stock behave more like debt because it provides predictable income to investors, akin to bond interest payments.

3. Voting rights: Preferred stock typically does not come with voting rights, unlike common stock. The lack of voting rights does not make it behave more like debt; rather, it distinguishes it from common equity.

4. Conversion options: While some preferred stocks have conversion options allowing them to be converted into common stock, this feature does not make them behave more like debt. Instead, it provides a potential for equity-like upside.

In summary, the key characteristic that makes preferred stock behave more like debt is the fixed dividend payments, which provide a steady income stream similar to interest payments on bonds.