1. Firms with a AAA bond rating would be very unlikely to issue non-convertible preferred stock.
2. The highest paid hedge fund manager in 2013 received compensation more than 50 times larger than the highest paid CEO.
3. The returns on the Russell 3000 are very different from the returns on the S&P500.
4. Suppose Wardell Inc. has issued a non-convertible A-rated preferred. If Wardell's stock price rises by 5% the preferred stock price will rise almost 5%.
5. Suppose Wardell Inc. has issued a non-convertible A-rated preferred. If long-term interest rates increase by 1% the preferred stock price will fall substantially.
6. A REIT must distribute almost all of its income as dividends to its shareholders.
7. The US represents over half of all the world's public equity markets (in terms of market value).
8. On average, stock returns are positively correlated with bond returns.
9. Suppose we have two bonds that are identical except that one has a floating rate and one has a fixed rate. The fixed rate bond would have a lower yield because there is less uncertainty in the future payments.
10. Suppose we have two bonds that are identical except that Bond A has a higher coupon rate than Bond B. Bond B will have a higher yield than Bond A.
11. The US bond market is larger than the US public equity market.
12. Failure to pay a preferred stock dividend can trigger bankruptcy.