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Why Are Bonds Less Risky Than Stocks

Question 58

Multiple Choice

Why are bonds less risky than stocks?


A) Dividend given on shares are usually less than the coupon-rate on bonds.
B) Bonds can be issued only by the government whereas shares are issued by private firms.
C) Bondholders have a claim on the assets of the firm whereas the shareholders do not.
D) Shareholders are entitled to a share of company's earnings.
E) The higher the profit of the firm,the greater the share of the bondholders.

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