Investment Securities

Why might investors prefer common stock OVER preferred stock

• Fixed dividend payments

• Voting rights and growth potential

• Priority during company bankruptcy

• Guaranteed capital gains

If a stock's dividend yield jumps from 2% to 4%, the MOST likely reason is:

• The stock price increased

• The company reduced its dividend

• The stock price decrease

• The company issued new shares

Company Z has 10 million shares at £50/share. Its Market Capitalisation is:

• £500 million

• £50 million

• £5 billion

• £50 billion

When interest rates rise, PRICE OF EXISTING BONDS:

• Increase

• Depend upon the coupon rate

• Stay the same

• Decrease

U.S Treasury bonds are low-risk because:

• They offer the highest yields

• Their prices never fluctuate

• They are backed by the Federal Government

• They have no maturity date

A bond with £1,000 face value and 5% coupon rate pays annually:

• £50 per year

• only £5 at maturity

• £500 over 10 years

• £1,050 at maturity

Hedgers in commodity markets aim to:

• Profit from price swings

• Lock in prices to reduce risk

• Manipulate supply chains

• Avoid taxes

During economic uncertainty, gold prices typically:

• Fall

• Track Oil Prices

• Stay Stable

• Rise

A wheat SURPLUS would cause wheat prices to:

• Drop

• Spike

• Stay the same

• Affect oil prices

Speculators trade commodities to:

• Use them in production

• Support farmers

• Profit from price volatility

• Stablilse markets