Which of the Following Statements Relating to Ordinary Shareholders Are

question 64

Multiple Choice

Which of the following statements relating to ordinary shareholders are correct?
I. Ordinary shareholders generally have greater risks than preference shareholders.
II. Ordinary shareholders are the last to receive a distribution if the company is wound up.
III. Ordinary shareholders have a greater opportunity for gain if the company is profitable than preference shareholders.
IV. Ordinary shareholders have the right to vote at meetings of the company.

• A) III and IV
• B) II and III
• C) I, III and IV
• D) I. II, III and IV

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Definitions:

Systematic Risk

The risk inherent to the entire market or market segment, representing factors that affect all companies such as economic, political, or social changes.

Diversifiable Risk

The portion of an investment's risk that can be reduced or eliminated through portfolio diversification, also known as unsystematic risk.

Unsystematic Risk

The type of risk that is unique to a specific company or industry, unpredictable and can be mitigated through diversification.

Minable Gold Reserves

The quantity of gold that is economically viable to extract from the earth's crust.