Which type of stock is typically considered less risky?

Preferred stock is generally considered less risky compared to common stock and convertible stock. This is primarily because preferred stockholders have a higher claim on assets and earnings than common stockholders, especially in the event of a company liquidation. They receive dividends before common stockholders, which tend to be fixed and regular, providing a more stable income stream.

In contrast, common stock carries higher risk since dividends can fluctuate and are not guaranteed; their payout depends on the company's profitability and decisions made by the board of directors. Convertible stock, while also having benefits of converting into common stock, does not inherently offer the same level of security as preferred stock. Common bonds may have lower risk than stocks but are not classified as a type of stock, placing them outside the context of this question.

Thus, preferred stock's prioritized position in the capital structure and the reliability of its dividends make it a less risky investment choice.