1. Which of the following is not true about rights trading on organized exchanges?

a.Continuous trading of a right for long periods of time (similar to stocks)

b.Rights trade at low prices

c. The period during which rights may be bought, sold, or exercised is usually four to six weeks after what is termed the ex-rights date.

d.Rights trading tends to surge during bull markets

2. Which type of voting allows minority shareholders to elect some of the directors of a corporation?

a. Preferred

b. Cumulative

c. Majority

d. Common

3.Which of the following is not true about preferred stock?

a.Preferred stocks are often cumulative in respect to dividends.

b.The aftertax cost is higher than debt with the same yield.

c.Dividends are legal obligations of the firm.

d100% of dividends are nontaxable to other corporations which hold preferred stock.