2. Which of the following is a characteristic of preferred stock?

1. Give voting rights to its owner.
2. It is like annuity.
3. Investors cannot force the payment of the dividend.
4. Dividends are tax-deductible for the firm as opposed to interest payment.

3. Which of the following is NOT money market security?

A. Bankers acceptance

B. Treasury notes

C. Federal funds

D. Eurodollars and Eurodollar CD's

8. You purchased a share of stock for $50. Two years later you received $2 as dividend and sold the share for $59. What was your holding period return?

18%

22%

20%

25%

9. Related to the previous question, what was your effective annual rate?

• 12.5%

10.5%

10.0%

9.5%