1.Which of the following statements is (are) correct?(x)A stockcan provide a return by paying a dividend, increasing in value orby some combination of the two.(y)A change in the ability ofcompany to pay a dividend or a change in the required return will,in general, cause the price of a preferred share of stock tochange.(z)Like bonds, the price of a preferred share variesinversely with the rate of return required by investors.

A.(x), (y) and (z)

B.(x) and (y) only

C.(x) and (z) only

D.(y) and (z) only

E.(z) only

4.You just purchased preferred shares in Citicorp(C.PRP) for$28.45. Your required return on this investment is 6.5 percent.What is amount of the annual dividendon this stock?

A.$0.55

B.$1.85

C.$1.95

D.$2.20

E.$2.85

5.Which of the following statements is (are) correct?(x)If therequired rate for an investor is above 4.5% and the expected rateof return on Big Baskets stock is about 6.0%, then the stock isprobably not a good buy for the investor. (y)The required return iswhat an investor needs to earn to be satisfied that he or she hasbeen adequately compensated for the risk of owning thesecurity.(z)A 5.0percent preferred stock with a market price of $90per share and a $100 par value pays a cash dividend of $4.50.

A.(x), (y) and (z)

B.(x) and (y) only

C.(x) and (z) only

D.(y) and (z) only

E.(y) only