1)Find the correct alternative, from the investor's point of view : Preferred stock is more risky than common stock The bond is more risky than common stock The preferred stock is more risky than the bond The bond is more risky than zero coupon bond 2)The preferred stock resembles the bond because: Offers fixed dividend It is a debt instrument It is perpetual It is an ownership instrument 3)When two financial securities have the same expected cash flow, the value of the security with ___________, will be lower than the value of the security ______________: Lower risk; lower risk Lower risk; higher risk Higher risk; higher risk Higher risk; lower risk
1)Find the correct alternative, from the investor's point of view : Preferred stock is more risky than common stock The bond is more risky than common stock The preferred stock is more risky than the bond The bond is more risky than zero coupon bond 2)The preferred stock resembles the bond because: Offers fixed dividend It is a debt instrument It is perpetual It is an ownership instrument 3)When two financial securities have the same expected cash flow, the value of the security with ___________, will be lower than the value of the security ______________: Lower risk; lower risk Lower risk; higher risk Higher risk; higher risk Higher risk; lower risk
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter5: Risk Analysis
Section: Chapter Questions
Problem 11QE: Market equity beta measures the covariability of a firms returns with all shares traded on the...
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1)Find the correct alternative, from the investor's point of view :
The bond is more risky than common stock
The preferred stock is more risky than the bond
The bond is more risky than zero coupon bond
2)The preferred stock resembles the bond because:
Offers fixed dividend
It is a debt instrument
It is perpetual
It is an ownership instrument
3)When two financial securities have the same expected cash flow, the value of the security with ___________, will be lower than the value of the security ______________:
Lower risk; lower risk
Lower risk; higher risk
Higher risk; higher risk
Higher risk; lower risk
4)Find the correct alternative, from the security’s issuer point of view:
The preferred stock is more risky than the bond
The bond is more risky than common stock
Common stock is more risky than preferred stock
The zero coupon bond is more risky than the ordinary bond
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