Answer: cumulative preference shares.

## Explanation Non-cumulative preference shares are more risky for investors than **cumulative preference shares** because: ### Key Differences: 1. **Cumulative Preference Shares**: If a company misses a dividend payment, the unpaid dividends accumulate and must be paid to cumulative preference shareholders before any dividends can be paid to common shareholders. 2. **Non-Cumulative Preference Shares**: If a company misses a dividend payment, the right to that dividend is lost forever. The company has no obligation to make up missed payments. ### Risk Comparison: - **Non-cumulative preference shares** carry higher risk because investors have no protection against missed dividend payments. - **Cumulative preference shares** provide a safety net where missed dividends accumulate, reducing the risk of permanent income loss. ### Comparison with Common Shares: - **Dividend-paying common shares**: These are generally more risky than preference shares because common shareholders have the lowest priority in dividend payments and liquidation. - **Non-dividend-paying common shares**: These are typically growth stocks where investors expect capital appreciation rather than dividends, and they carry the highest risk among equity securities. Therefore, among the given options, non-cumulative preference shares are more risky than cumulative preference shares due to the lack of dividend accumulation protection.

Author: LeetQuiz .