Which of the following types of risk affect owners of fixed income securities more than owners of equity securities

Question

Quizplus · Accepted Answer

Purchasing power risk, which refers to the risk that inflation will decrease the value of fixed income investments over time is more of a concern for owners of fixed income securities than owners of equity securities. Equity securities represent ownership in a company and their value is more closely tied to the company's profitability and growth potential, making them better able to maintain their value in the face of inflation. Business risk, financial risk, market risk, and event risk may affect both types of securities similarly.

Which of the Following Types of Risk Affect Owners of Fixed