Which of the following investments would rank the highest with regard to safety?
A)Government bonds
B)Common stock
C)Preferred stock
D)Corporate bonds
IS A Government bonds correct?thank you:))))
Right!
Yes, you are correct. Government bonds would rank the highest with regard to safety among the given options. Government bonds are considered safer because they are backed by the government's ability to tax and print money. This reduces the risk of default compared to other types of investments.
Yes, government bonds are generally considered to rank the highest with regard to safety among the given investment options. Here's why:
When it comes to evaluating the safety of an investment, it's important to consider factors such as credit risk, liquidity risk, and market risk.
Government bonds are issued by the government, which is generally considered to have a low level of credit risk since governments are typically able to repay their debts. Additionally, government bonds are often referred to as "risk-free" because they are backed by the full faith and credit of the government, meaning that they are considered relatively safe.
On the other hand, common stock represents ownership in a company, and it carries higher risk compared to government bonds. The value of common stock can fluctuate greatly, as it is influenced by factors such as company performance, market conditions, and investor sentiment.
Preferred stock sits between common stock and government bonds in terms of safety. While it generally provides a fixed dividend payment, it still carries some level of market and liquidity risk.
Corporate bonds are issued by corporations and are exposed to both credit risk and market risk. The safety of corporate bonds depends on the financial stability of the issuing company. If the company defaults on its payments, there is a risk of losing all or part of the invested amount.
So, considering all these factors, government bonds are considered to be the safest option among the given choices.