When Asking How Much More Is a Preferred Share Worth

question 31

Multiple Choice

When asking how much more is a preferred share worth than a common share, the answer depends upon which of the following?

• A) The health of the company- preferred shares are worth much more than common shares if the company is very healthy.
• B) The stage of the company - preferred shares are worth much more than common shares at early stages of the company's life.
• C) Neither of the above are considerations.
• D) Both of the above are considerations.

---

Definitions:

Tchebysheff's Theorem

A theorem that provides a bound on the probability that the value of a random variable lies within a certain number of standard deviations of the mean.

Observations

Data collected or noticed during an experiment or study, typically recorded for further analysis.

Percentile

A value below which a certain percent of observations fall, used as a measure to understand the distribution of data in a dataset.

Tchebysheff's Theorem

A theorem stating that for any set of data, the proportion of results within k standard deviations from the mean is at least 1-(1/k^2) for k>1.