Par Value of a Stock Refers to The

question 39

Multiple Choice

Par value of a stock refers to the:

• A)Issue price of the stock.
• B)Value assigned to a share of stock by the corporate charter.
• C)Market value of the stock on the date of the financial statements.
• D)Maximum selling price of the stock.
• E)Dividend value of the stock.

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Definitions:

Nonsystematic Risk

The risk associated with a specific issuer of a security, industry, or sector, which can be mitigated through diversification.

Systematic Risk

The risk inherent to the entire market or entire market segment, which cannot be mitigated through diversification.

Purely Passive Strategy

An investment strategy that involves no active management and typically focuses on investing in index funds to replicate market returns.

Mean-Variance Efficient

A portfolio strategy that aims to minimize risk for a given level of expected return, or equivalently, maximize return for a given level of risk.