Preferred stocks and bonds have some similar characteristics.

Question

Quizplus · Accepted Answer

Both preferred stocks and bonds are typically considered to be fixed income investments, offering a consistent stream of income to investors. They also both have priority ranking over common stocks in the event of bankruptcy or liquidation. However, there are also significant differences between the two types of investments, such as the fact that preferred stocks represent ownership in a company, while bonds represent a loan to a company or government entity.

Preferred Stocks and Bonds Have Some Similar Characteristics