Sản phẩm & Rủi roCâu 57 / 398
Which statement about the risk-return relationship of common stock versus corporate bonds of the same company is generally TRUE?
a.Common stock typically carries higher risk and higher potential return than the company's bonds
b.Bonds always outperform the company's stock
c.Common stock has a guaranteed return, unlike bonds
d.Bonds rank behind common stock in a bankruptcy
Giải thích
Common stock is a residual claim with no fixed payment and last priority in bankruptcy, so it carries higher risk and higher potential return than the same company's bonds. Bonds do not always outperform, stock returns are not guaranteed, and bonds rank ahead of stock in bankruptcy.
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Câu hỏi liên quan cùng chủ đề
- An investor buys a short-term bond and, when it matures, can only reinvest the proceeds at a lower interest rate than before. This describes:
- Compared with a long-term bond, a short-term bond of the same issuer generally has:
- An investor buys an ADR of a European company. Even if the company performs well, the investor's dollar return can be reduced by:
- A stock's par value on the balance sheet primarily represents:
- Banker's acceptances are money-market instruments most commonly used to finance:
- An investor seeking regular income with more safety than common stock, but a higher fixed payment priority, would MOST likely choose:
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