The Prime Rate

question 84

Multiple Choice

The prime rate:

• A) is the rate that banks are charged by the Bank of Canada.
• B) was over 30% in the early 1980s.
• C) is fixed over a long period of time.
• D) is affected by economic and political factors.

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Definitions:

Dividends in Arrears

Dividends on preferred stock that have been declared but not paid to shareholders.

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall market capitalization remains the same.

Par Value

Par value is the nominal or face value of a stock or bond as stated by the issuer, which often bears no relation to its market value.

Treasury Stock

Refers to shares that were issued by a company and later repurchased. These shares do not pay dividends, have no voting rights, and are not included in shares outstanding calculations.