Characteristics Of Bonds And Common And Preferred Stocks

Class: A
Type: high-grade, long-term bonds
Characteristics: Highest safety of principal; continued income, low rate of return, strong price stability.

Class: B
Type: good grade bonds; high-grade preferred stocks
Characteristics: Higher rate of return, with reasonable safety; risk factor slightly greater than above.

Class: C
Type: high-grade commons (defensive type)
Characteristics: Fair degree of safety, with higher income than above, but subject to fluctuations in value and rate of return.

Class: D
Type: medium-grade commons
Characteristics: Higher degree of risk, coupled with variable rate of return; wide fluctuations in value; possible appreciation of capital.

Class: E
Type: speculative commons
Characteristics: Widest fluctuations; little or no return; highest degree of speculation; low safety of principal amount.