In financial terms, what is a proxy?

In financial terms, a proxy refers to a substitute or stand-in, particularly in situations where an individual cannot be present to exercise their rights or votes. This is commonly relevant in the context of corporate governance, where shareholders can appoint someone else to vote on their behalf at shareholder meetings. The proxy serves as a means for shareholders to communicate their preferences or decisions regarding company matters, such as mergers, board elections, or other significant corporate actions.

In this context, considering the choices presented, a proxy is indeed the most appropriately defined as a substitute used for estimation or for making decisions on behalf of another party. Other concepts, such as financial securities, risk assessment tools, or investment strategies, do not encapsulate the essence of what a proxy represents in the realm of corporate governance and voting rights.