In which of the following ways are some preferred shares similar to bonds?
I.Call provisions
II.Convertible features
III.Retraction provisions
IV.Rated by rating agencies
A)I, II, and III
B)I, II, and IV
C)II and III
D)I, II, III, and IV

Question

Quizplus · Accepted Answer

Preferred shares and bonds can share characteristics such as call provisions (allowing the issuer to redeem them before maturity), convertible features (can be converted into another form of security), retraction provisions (allowing the holder to sell them back to the issuer), and both can be rated by rating agencies to assess their credit risk.

In Which of the Following Ways Are Some Preferred Shares