Instructions

No ext

Which of the following is a characteristic of common equity:

A$.$ it represents an ownership interest in the company.

B$.$ the company is obligated to make periodic dividend payments.

C$.$ they have market$-$determined quoted prices.

The type of equity voting right that allows shareholders to direct their total voting

rights to specific candidates is:

A$.$ proxy voting.

B$.$ statutory voting.

C$.$ cumulative voting.

Cumulative preference shares entitle shareholders to:

A$.$ accrue unpaid dividends that must be paid in full before dividends on common

shares can be paid.

B$.$ convert their shares into a specified number of common shares.

C$.$ receive an additional dividend if the company's profits exceed a predetermined

level.

Which of the following statements about private equity securities is correct?

A$.$ they trade on secondary markets.

B$.$ they do not have market$-$determined quoted prices.

C$.$ they are highly liquid.

When investing in sponsored depository receipts, the voting rights to the shares

belong to:

A$.$ the depository bank.

B$.$ the investors in the depository receipts.

C$.$ the sponsor of the depository receipts.

Which of the following is incorrect about the risk of an equity security? The risk of an

equity security is:

A$.$ measured using the standard deviation of its dividends.

B$.$ based on the uncertainty of its cash flows.