Final answer:
Debt securities are generally more appealing to some investors than equity due to their lower volatility and stable income stream from interest payments. They do not offer voting rights like equities but do offer limited liability protection to investors.
Step-by-step explanation:
When it comes to the question of why debt securities are often more appealing to investors than equity, the most fitting reason among the provided options is lower volatility. Debt securities are typically considered to have lower volatility because they provide a fixed income stream through regular interest payments. This can make them more stable investments compared to stocks, which are subject to market fluctuations and company performance. Stocks, on the other hand, offer higher potential returns due to their growth prospects but come with higher risks and volatility.
Debt securities usually do not provide voting rights or a claim on company assets beyond the specified interest payments and the return of principal at maturity. Whereas equity investors are part-owners of a company with potential voting rights and a claim on assets. In terms of liability, both debt securities and equity offer limited liability to investors; this means investors can lose their invested capital but are not personally liable for the company's debts.