Preferred stocks beta with respect to the market

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1. Which of the following items is least appropriate to purchase with a credit card unless you will pay the bill in full when the statement is received?

a. ?A new suit

b. ?Groceries

c. ?Microwave oven

d. ?Smart phone

2. Suppose that you own IBM preferred stock that pays an annual, fixed, and perpetual dividend of $10 which is worth $100 per share. The market return is 12% and the risk-free rate is 4%. What is IBM preferred stock's beta with respect to the market?

a. 0.64

b. 0.75

c. 1.30

d. 1.75

Reference no: EM131308198

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