UPSC 2025: 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?

The correct answer is option (a): Both Statement II and Statement III are correct and both of them explain Statement I. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.

This question was asked in UPSC CSE Prelims 2025, GS Paper 1, as Question 7. It falls under Indian Economy > Financial Markets & Capital Markets.

This question is rated "easy". It tests basic recall and most well-prepared aspirants should answer it correctly.

UPSC has asked 41 questions from Financial Markets & Capital Markets (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.