Which of the Following Statements Is True

question 120

Multiple Choice

Which of the following statements is true?

• A) Preferred shares have a volatile market value therefore, they are a more risky investment than common shares.
• B) Common shares have a dividend rate fixed by the share contract.
• C) Corporations are not always considered to be a separate legal entity.
• D) Transfer of ownership is easy with a corporation.

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Definitions:

Asset Price

The current market value or price at which an asset, such as a stock, bond, or commodity, can be bought or sold.

Potential Loss

The amount of money that could be lost in an investment, considering possible outcomes under various scenarios, noting the risk involved.

Long

An investment strategy where an investor purchases a security with the expectation that it will increase in value over time.

Futures Contract

An agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.