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?
ABoth Statement II and Statement III are correct and both of them explain Statement I
BBoth Statement I and Statement II are correct and Statement I explains Statement II
COnly one of the Statements II and III is correct and that explains Statement I
DNeither Statement II nor Statement III is correct
Answer & Solution
Correct answer: A. Both Statement II and Statement III are correct and both of them explain Statement I
UPSC CSE Prelims 2025 (GS-I, Set A), Q.7. Official answer key: A.
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