2025 Economy - Bonds and Stocks

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, bond- holders are prioritized over stockholders by a company. Which one of the following is correct in respect of the above statements?

• Both Statement II and Statement III are correct and both of them explain Statement I
• Both Statement I and Statement II are correct and Statement I explains Statement II
• Only one of the Statements II and III is correct and that explains Statement I
• Neither Statement II nor Statement III is correct