Rank in Ascending Order (Lowest to Highest) the Relative Riskiness

question 100

Multiple Choice

Rank in ascending order (lowest to highest) the relative riskiness of the various types of corporate and government securities.

• A) common stock, preferred stock, corporate debt, long-term government debt
• B) corporate debt, long-term government debt, preferred stock, common stock
• C) long-term government debt, corporate debt, preferred stock, common stock
• D) corporate debt, preferred stock, long-term government debt, common stock

Know how to compute geometric and arithmetic average returns.

Understand the concept of the real rate of return and its importance in financial analysis.

Be able to identify and calculate the risk premium on various investment types.

Apply concepts of annual coupon and bond pricing in investment return calculations.

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