Which of the Following Methods Should Be Used to Account

question 20

Multiple Choice

Which of the following methods should be used to account for the conversion of preferred stock to common stock? $\begin{array}{lll}& \text {Book Value}& \text {Market Value}\\\text { I. } & \text { Yes } & \text { No } \\\text { II. } & \text { Yes } & \text { Yes } \\\text { III. } & \text { No } & \text { Yes } \\\text { IV } & \text { No } & \text { No }\end{array}$

• A)I
• B)II
• C)III
• D)IV

Understand the impact of hedging on financial risk management.

Differentiate between various financial instruments such as forward, futures, options, and swaps.

Identify the obligations and rights associated with buying and selling options.

Analyze the effect of price changes on firm's risk profile and value.