Preferred Stock Typically Has a Par Value, and the Dividend

question 20

True/False

Preferred stock typically has a par value, and the dividend is often stated as a percentage of par.The par value is also important in the event of liquidation, as the preferred stockholders are generally entitled to receive the par value before anything is given to the common stockholders.

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Definitions:

Hedge Ratio

The hedge ratio is a financial ratio that compares the value of a position protected through hedging with the size of the entire position itself.

Futures Position

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

Exchange Rate

The value of one currency for the purpose of conversion to another, determining how much of one currency can be exchanged for another.

Portfolio's Beta

A measure of the volatility, or systemic risk, of a portfolio in comparison to the market as a whole.