Rank the Risk of the Following Securities from Lowest to Highest

question 29

Multiple Choice

Rank the risk of the following securities from lowest to highest.

• A) I, II, III, IV
• B) IV, III, II, I
• C) I, II, IV, III
• D) IV, I, II, III
• I.Long-term unsecured debt
• II.Convertible preferred shares
• III.Common equity
• IV.Bank loans

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Definitions:

Nonrival-in-consumption

A characteristic of goods where one person's consumption does not diminish the ability of others to use the same good.

Nonexcludable

A characteristic of a good or service that prevents the owner from effectively denying access to it to non-paying individuals or entities.

Nonrivalry

A characteristic of a good or service where its consumption by one individual does not reduce its availability to others.

Public Good

A good or service offered free of charge to every member of a society by either the government or a private entity or organization, aiming not for profit.