Question 1.

Preferred stock has characteristics of both that and comes in stock. Which characteristics of preferred stocks resemble that of common stock?

A. Preferred & common dividends are not tax-deductible expenses; both preferred and common stocks are classified shareholder equity on balance sheet; Preferred and common stock have infinite majorities; both pay dividends at managements discretion

B. Preferred and common stock both carry voting rights: preferred and common dividends are equally stable and are at managements discretion

C. Preferred and common dividends are not tax-deductible expenses: preferred and common stock both carry voting rights

D. Preferred and common stock are classified as a liability on the balance sheet; preferred and common dividends are not tax-deductible expenses

Question 2.

All of the following are examples of financial assets except

A. Patent to new drug

B. Trademark

C. None of these are financial assets

D. Copy rights to a textbook

E. Inventory of office supplies