Which of the following is the correct order of corporate issues based on risk and return? (most risk-return to least risk-return)
A) Common stock, subordinated debentures, secured debt, treasury bills.
B) Preferred stock, common stock, subordinated debentures, secured debt.
C) Common stock, long-term government bonds, secured debt, subordinated debt.
D) Common stock, secured debt, subordinated debentures, preferred stock.

Question

Quizplus · Accepted Answer

The correct order of corporate issues based on risk and return is from most risk-return to least risk-return. Common stock has the highest risk-return, followed by subordinated debentures, secured debt, and treasury bills. Therefore, option A is the best choice as it lists the options in the correct order. Option B is not correct as preferred stock is less risky than common stock. Option C is also not correct as long-term government bonds have a lower risk-return than common stock. Option D is not correct as preferred stock has a lower risk-return than subordinated debentures.

Which of the Following Is the Correct Order of Corporate