Which of the following investors incurs the least risk?

Question

Quizplus · Accepted Answer

Bondholders generally incur the least risk as they have priority in receiving payments and are guaranteed to receive the principal amount back when the bond reaches maturity. Preferred stockholders come next in terms of risk as they have a priority claim to dividends, but may not be guaranteed to receive their dividend payments. Common stockholders, on the other hand, have the highest level of risk as they have the lowest priority in receiving payments and are not guaranteed any dividend payments.

Which of the Following Investors Incurs the Least Risk