The U.S. Securities and Exchange Commission refers to risk as the degree of uncertainty and/or potential financial loss inherent in an investment decision.
If the business goes bankrupt, its assets are liquidated, and the company's bondholders are paid first and then its holders of preferred stock. Common stockholders are the last to share in whatever is left over, which can sometimes be nothing.There's also volatility risk. This type of risk can make a company's stock price go up or down depending on several factors.
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