Attempt this previous-year question. The correct option stays hidden until you choose.
Consider the following statements:
Statement I: As regards returns from an investment in a company, generally, bondholders are considered to be relatively at lower risk than stockholders.
Statement II: Bondholders are lenders to a company whereas stockholders are its owners.
Statement III: For repayment purpose, bondholders are prioritized over stockholders by a company. Which one of the following is correct in respect of the above statements?
Pick an option to check yourself.
• Correct Answer: A
• All three statements are correct and explain why bondholders face lower risk than stockholders.
• Bondholders are lenders with contractual repayment priority, while stockholders are owners with residual claims.
• In liquidation, bondholders are repaid before stockholders.
Attempt Prelims MCQs or open Mains questions by paper — then continue the same bank inside the app with visual decks.
GyanGram