1)Junk bonds are referred to as junk primarily because they offer high-yeilds but with low risk instead of the typical risk/reward characteristics of debt instruments

True

False

2)Some consider perffred stock to be a hybrid security- as sort of cross between common stock and a bond

True

False

3) The correct order in which investors are entitled to the the cash flow of a firm is generally preferred shareholders first, then bondholders, then common shareholders last.

True

False