Which of the Following Is Not True About Rights Trading

question 4

Multiple Choice

Which of the following is not true about rights trading on organized exchanges?

• A) Rights trade at low prices
• B) Continuous trading of a right for long periods of time (similar to stocks)
• C) Rights trading tends to surge during bull markets
• D) The period during which rights may be bought,sold,or exercised is usually four to six weeks after what is termed the ex-rights date.

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Definitions:

Interest Rate

The part of a loan that incurs interest charges for the borrower, usually shown as an annual percent of the outstanding loan.

Investment

Allocating resources, such as capital or time, with the expectation of generating an income or profit.

Interest

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, or the income earned from deposited funds.

Interest Rate

The proportion, in percentage, charged on the total amount borrowed or earned on the deposited amount over a specific time period.