• Question 1

2 out of 2 points

Which of the following is considered to be the most risky?

Answer

Selected Answer:

common stocks

Correct Answer:

common stocks

• Question 2

2 out of 2 points

___________________ is often called a hybrid security.

Answer

Selected Answer:

Preferred stock

Correct Answer:

Preferred stock

• Question 3

2 out of 2 points

Which of the following bonds can be redeemed prior to maturity by the firm?

Answer

Selected Answer:

callable bonds

Correct Answer:

callable bonds

• Question 4

2 out of 2 points

Which of the following is not a component of the Gordon (or constant dividend growth rate) model for valuing stocks?

Answer

Selected Answer:

next year’s expected earnings

Correct Answer:

next year’s expected earnings

• Question 5

2 out of 2 points

A (n) _____________ gives the bondholder a claim to specific assets (identified through serial numbers) such as railroad cars or airplanes.

Answer

Selected Answer:

equipment trust certificate

Correct Answer:

equipment trust certificate