The correct answer is D. preferred stock.
Preferred stock is a type of equity security that has a higher claim on a company’s assets and earnings than common stock. Preferred stockholders are entitled to receive dividends before common stockholders, and their dividends are usually fixed. Preferred stock can also be redeemed by the company at a specified price, which gives preferred stockholders more protection than common stockholders.
Bonds are a type of debt security that represents a loan made by an investor to a borrower (typically corporate or governmental). The borrower issues bonds to raise money and agrees to pay the bondholders interest at a fixed rate for a specified period of time. The bondholders are then repaid the principal amount of the loan at the end of the term.
Common shares are a type of equity security that represents ownership in a company. Common shareholders have the right to vote on company matters, such as the election of directors, and they share in the company’s profits through dividends. However, common shareholders also have the most risk, as they are the last to be paid in the event of a company liquidation.
In conclusion, preferred stock is a type of equity security that has characteristics of both bonds and common stock. Preferred stockholders have a higher claim on a company’s assets and earnings than common stockholders, but they also have less risk than common stockholders.