Stockholders Normally Receive Higher Expected Returns, Compared to Bondholders, Since

question 145

Multiple Choice

Stockholders normally receive higher expected returns, compared to bondholders, since

• A)the government mandates higher payments to stockholders.
• B)stock prices go up and down while bond prices do not.
• C)profits may only be retained by the corporation and not paid out to stockholders.
• D)stockholders could be left with nothing if the corporation fails, and bondholders will receive interest payments even if the corporation suffers losses.

---

Definitions:

Intention Movement

Preparatory actions or gestures indicating the onset of a more significant movement or behavior.

Appetitive Behavior

A type of behavior initiated by an organism in pursuit of fulfilling a need or desire, often relating to food, drink, or other necessities or pleasures.

Learned Behavior

A changed behavior acquired through experience.

Ethological Displacement

A behavior that occurs when an animal or human engages in an unrelated activity to reduce stress or tension when the normal response is thwarted or impossible.