Of the following examples of personal investment instruments, which entails the smallest risk of losing the principal?

Common stocks represent ownership in a company and are subject to market fluctuations. The value of stocks can vary significantly, and while they may offer high returns, they also carry the risk of losing the entire principal amount if the company performs poorly. Thus, they do not provide the same level of security as CDs.

Preferred stocks are a hybrid investment that typically offers fixed dividends and has a higher claim on assets than common stocks in the event of liquidation. However, they still carry a risk of losing value in turbulent market conditions and do not guarantee the return of the principal, rendering them riskier than CDs.

Corporate bonds are debt securities issued by companies to raise capital. While they are generally less risky than stocks, they can still default, which means investors may not receive their principal back. The risk varies based on the issuing company’s creditworthiness, making them riskier than the guaranteed return of CDs.