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Which of the following has the highest level of security?

AThe ownership of preferred stock
BThe ownership of common stock.
CThe ownership of a private corporation

D, The ownership of a sole proprietorship.

Verified Answer :

josieheff00
AThe ownership of a preferred stock - Apex 

palebadgworthy

The correct answer is A.

The riskiest option would be the ownership of a sole propietorship, as its owner is personally liable for the losses or due debt payments of the firm even with his own patrimony.

When someone buys common stock becomes the owner of a corporation or private company. This person would be liable for the losses of the company, but the largest amount he/she can lose in case things go wrong is the price paid for the stock (his/her personal patrimony is not involved). In case the company is liquidated, the owners are the last group to receive any payment, if there is still something left for them.

Preferred stock does not entail ownership but its holder is entitled to dividend payments (as owners) and to make profit by reselling the stock (as owners). The difference is that they would be paid before than owners in case of a business liquidation.

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