1. In what order will the following parties be paid in a liqu dation? Je bondhol
ID: 2788567 • Letter: 1
Question
1. In what order will the following parties be paid in a liqu dation? Je bondholder. ll. senior preferred shareholder. :lIl. common stock shareholder. :lV. regular preferred shareholder 2. Which two of the following are the primary risks associated with preferred stock? l event risk. :ll. liquidity risk. :Ill. interest rate risk. :lV. business risk 3. As an investment vehicle, bonds can provide income in the form of ncome only. gains only. and capital gains. a.current b.capital c.both current income d.neither current income nor capital gains. . With respect to bond yields, the expectations hypothesis states that a.an increasing d. a stable inflation nflation nflation expectation causes expectation resuts expectation resuts results in a higher long-term nterest rates today. sloping yield curve ping yield nflation expectation n a downward- in a upward- humped yield curve.Explanation / Answer
1.
Order of parties paid at time of liquaidation is mention below:
1. Bondholder
2. Senior Preferred stock holder.
3. Regular Preferred stock holder.
4. Common Stockholder.
2.
Primary risk associated with preferred stock is interest rate risk.
Option (C) is correct answer.
3.
Bond provide income in form of current income as coupon payment and capital gain.
Option (C) is correct answer.
4.
if inflation increase then investor wants higher return on bond,so, then demand higher yield on long term bond.
Option (A) is correct answer.
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