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Which of the Following Statements Concerning Auction Rate Money Market

Question 20

Multiple Choice

Which of the following statements concerning auction rate money market preferred stocks is (are) true?


A) The price of the stock stays near par.
B) Fifty percent of the dividends are exempt from corporate income taxes.
C) The dividend yield on these securities is adjusted every 20 days through an auction process, where investors can exchange their stock for cash.
D) The price of the stock stays well above par.

Correct Answer:

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