When Investors Purchase ________ Stock, They Receive a Priority Claim

question 241

Multiple Choice

When investors purchase ________ stock, they receive a priority claim in the payment of dividends, as well as assets if the business is liquidated. However, these investors do not have voting rights.

• A) common
• B) preferred
• C) secured
• D) debenture

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Definitions:

Risk-free Rate

The theoretical rate of return on an investment with zero risk, typically represented by government bonds.

Market Return

The total return of a market index based on the collective performance of its constituents, typically over a specified time frame.

Portfolio Expected Return

Portfolio Expected Return is the weighted average of the expected returns on the assets included in a portfolio.

Portfolio Beta

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