International Finance And Treasury - Study Mode

[#686] Type of preferred stock whose dividend payments are never paid to stock holders and are not considered in in arrears is classified as
Correct Answer

(C) non-cumulative preferred stock

Explanation

Solution: Type of preferred stock whose dividend payments are never paid to stock holders and are not considered in in arrears is classified as non-cumulative preferred stock. Noncumulative preferred stock is a type of preferred stock that allows the issuing company to skip dividends and which then cancels the company's obligation to eventually pay those dividends.

[#687] Sum of capital gains and dividend payments which are paid to stock holders on periodic basis is equal to
Correct Answer

(C) return to stock holder

Explanation

Solution: Sum of capital gains and dividend payments which are paid to stock holders on periodic basis is equal to return to stock holder. The return on shareholders’ equity ratio shows how much money is returned to the owners as a percentage of the money they have invested or retained in the company.

[#688] Type of financial security whose payoff is linked to any other security is called
Correct Answer

(C) derivate security

Explanation

Solution: Type of financial security whose payoff is linked to any other security is called derivate security. A derivative is a financial security with a value that is reliant upon or derived from, an underlying asset or group of assets a benchmark.

[#689] Form of market efficiency which considers speed with which information at public level is impounded in prices of stock is classified as
Correct Answer

(A) semi-strong form market efficiency

Explanation

Solution: Form of market efficiency which considers speed with which information at public level is impounded in prices of stock is classified as semi-strong form market efficiency. The semi-strong form efficiency is a type of efficient market hypothesis (EMH), which holds that security prices adjust quickly to newly available information, thus eliminating the use of fundamental or technical analysis to achieving a higher return.

[#690] Stock prices of five companies are $50, $60, $55, $58, $63 then initial value of price weighted index is
Correct Answer

(B) $57.20

Explanation

Solution: Initial value of price weighted index = ($50 + $60 + $55 + $58 + $63) = $57.20.