Rank in Ascending Order (Lowest to Highest) the Relative Riskiness

question 100

Multiple Choice

Rank in ascending order (lowest to highest) the relative riskiness of the various types of corporate and government securities.

• A) common stock, preferred stock, corporate debt, long-term government debt
• B) corporate debt, long-term government debt, preferred stock, common stock
• C) long-term government debt, corporate debt, preferred stock, common stock
• D) corporate debt, preferred stock, long-term government debt, common stock

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Definitions:

Trade-off

A situation that involves losing one quality or aspect of something in return for gaining another quality or aspect.

Responsiveness

Refers to the ability of a system or organization to react quickly and effectively to changes, demands, or opportunities.

Efficiency

The ability to accomplish a task or a set of tasks with the minimum amount of resources, time, and waste.

Pricing Scheme

A strategy or formula used to determine the selling price of goods or services.