SECURITY ANALYSIS

What are equity securities?

• Debt instruments that guarantee returns

• Ownership interests in a company

• Fixed-income investments

• Government bonds

Which of the following is NOT a characteristic of equity securities?

• Ownership in a company

• Fixed dividends

• Voting rights

• Market fluctuation risks

What is a primary advantage of investing in common stocks?

• Guaranteed returns

• Fixed income

• Potential for high returns and voting rights

• Priority in liquidation

Which type of equity security typically does NOT provide voting rights?

• Common stocks

• Preferred stocks

• Convertible securities

• All of the above provide voting rights

What happens when a company issues new shares?

• It guarantees higher dividends for existing shareholders

• It can dilute the ownership percentage of existing shareholders

• It automatically increases the stock price

• It eliminates voting rights for common stockholders

What are debt securities commonly referred to as?

• Equity securities

• Fixed-income securities

• Derivative securities

• Hybrid securities

What is the primary purpose of issuing debt securities?

• To pay dividends to shareholders

• To finance operations and acquire assets

• To increase stock prices

• To provide voting rights to investors

Which of the following is a feature of debt securities?

• They do not have a maturity date

• They always offer higher returns than equity securities

• They have a fixed or variable coupon rate

• They are exclusively for long-term investments

What does 'yield-to-maturity' (YTM) measure?

• The fixed income paid to investors

• The total capital raised through issuing securities

• The market value of the securities upon issuance

• The annual rate of return expected if the debt is held to maturity

What is a characteristic of convertible debt securities?

• They allow lenders to convert a loan into equity securities.

• They have no expiration date.

• They can only be sold in the primary market.

• They do not pay any interest.