Which of the following securities poses the greatest financial risk for the investor?

Question

Quizplus · Accepted Answer

Common equity typically carries the greatest financial risk for investors because it has the lowest claim on assets and income. In the event of a company's liquidation, common shareholders are paid out after debt holders, preferred shareholders, and other creditors, making their investment more vulnerable to company performance and market fluctuations.

Which of the Following Securities Poses the Greatest Financial Risk