QUESTION 3

1. Shareholders of convertible preferred stock generally have the:

	A.	Obligation to convert their shares into callable shares of common stock.
	B.	Right to convert their shares into shares of common stock.
	C.	Right to convert their shares into bonds with an equivalent yield-to-maturity.
	D.	Obligation to convert their shares into shares of common stock.
	E.	Right to convert their shares into cash at par value at their discretion.

QUESTION 4

1. Which type of bond allows the issuer to buy back the bonds before maturity?

	A.	Retractable bond.
	B.	Convertible bond.
	C.	Zero-coupon bond.
	D.	Callable bond.
	E.	High yield bond.

QUESTION 5

1. A supernormal growth stock generally:

	A.	Has dividends that grow at a high rate for the life of the stock.
	B.	Is valued using the preferred stock valuation technique.
	C.	Is associated with a company that is experiencing rapid contraction.
	D.	Has high growth dividends only for a limited number of years.
	E.	Tends to increase its dividends per share by 30% or more for an extended number of years.

QUESTION 6

1. Which one of the following will increase the present value of an annuity?

A.

Payment of annuity in the end instead of payment at the beginning.