Homework answers / question archive / 1)Define risk as it relates to an investment? Briefly discuss how risk can be measured 2)Briefly discuss the difference between a share of common stock versus a share of preferred stock

1)Define risk as it relates to an investment? Briefly discuss how risk can be measured 2)Briefly discuss the difference between a share of common stock versus a share of preferred stock

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1)Define risk as it relates to an investment? Briefly discuss how risk can be measured

2)Briefly discuss the difference between a share of common stock versus a share of preferred stock. What are the characteristics of each? What is meant by a call provision and what is a convertible stock?

3)What is a bond? Briefly discuss the difference between a coupon bond and a zero coupon bond. What are the characteristics of each? Define par value as it relates to a bond.       

4)Briefly discuss the relationship between bond price and yield to maturity (interest rate).

5)Current forecasts are for ABC Company to pay annual cash dividends of $3.00, $0, and $6.50 per share over the next three years, respectively. At the end of three years, you expect to sell your share at a market price of $127. What should the price of a share today be with a 10% expected rate of return?