Adjustable rate preferred stock (ARPS) offer competitive rates of return with traditional money- market instruments but:

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ARPS still provide the corporate investor with the tax exclusion on dividend income, which is a unique feature that traditional money-market instruments do not have. Option A is not necessarily true, as some ARPS may be rated by Moody's or Standard & Poor's. Option C is not true, as the rate of dividend income on ARPS is adjustable. Option D is not necessarily true for all ARPS, as the trading market may vary depending on the specific issue.

Adjustable Rate Preferred Stock (ARPS) Offer Competitive Rates of Return