If Securities Firms Are Subject to Systemic Risk, This Means

question 49

True/False

If securities firms are subject to systemic risk, this means that their main source of risk is a rise in interest rates, which may cause the value of their bond holdings to decline.

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Definitions:

Cumulative Preferred Stock

A type of preferred stock that entitles shareholders to receive dividends in arrears before common stockholders can be paid dividends.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on part of the corporation's profits or losses.

Dividends Per Share

Dividends per share is a measure reflecting the amount of declared dividends for each share of common stock, revealing how much a company pays out in dividends relative to its share price.

Fiscal Year

A one-year period selected for accounting purposes, which does not necessarily correspond to the calendar year.