1. Valuing Preferred Stock Cleveland, Inc. has an issue of preferred stock outstanding that pays a $9.20 dividend every year in perpetuity. If this issue currently sells for $107 per share, what is the required return?

Select one:

A. 8.60%

B. 9.20%

C. 9.84%

D. 10.70%

E. 12.40%

2. Efficient markets involve random price changes because we cannot predict surprises

Select one:

a. True

b. False

3. The following is an example of systematic risk:

Select one:

A. A company experiences a shortage one of their major inputs

B. A firm announces that its CEO has been fired.

C. Market interest rates are lowered.

D. A firms project is abandoned after one of the projects developers leaves the company.

E. A union organization announces a labor strike in a small community

4. According to the text notes, you have achieved MOST of the diversification benefits by the time you have __________ stocks in a portfolio.

Select one:

A. between 1 and 5

B. between 6 and 10

C. between 20 and 30

D. between 1,000 and 1,500

E. More than 1,500