Reference no: EM131561987

1. With regard to preferred stock,

a. no dividends are expected by the stockholders

b. its stockholders may have the right to participate, along with common stockholders, if an extra dividend is declared.

c. there is a legal requirement for a corporation to declare a dividend on preferred stock.

d. its issuance provides no flexibility to the issuing company because its terms always require mandatory dividend payments.

2. Two assets have a coefficient of correlation of -.4.

Combining these assets will have no effect on risk.

Combining these assets will increase risk.

Combining these assets will reduce risk.

Combining these assets may either raise or lower risk.