Stack

Categories: Bonds, Banking

Scrooge McDuck piles his cash in his money bin for easy swimming, but, in the real world, we stack our bills neatly.

"Capital Stack" refers to the totality of all the investment instruments used to fund a particular project or company. The investments at the top of the stack are considered riskier, and people typically require those to pay out better dividends and interest. The lower in the stack you go, the less risk the investments are thought to have.

Think of it like a food pyramid for yummy investments: lenders and stockholders are the ones most concerned with counting their "risk calories."

It also means that Scrooge McDuck is incredibly disorganized and doesn't have a sound grasp of investment risk. He does have a mean backstroke, though.

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