Auction-rate preferred stock offers competitive rates of return with traditional money market instruments but

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Auction-rate preferred stock still provides the corporate investor with the tax exclusion on dividend income, which makes it a desirable investment option. The other choices are incorrect as auction-rate preferred stock is typically rated by Moody's or Standard & Poor's, may not have a fixed rate of dividend income, and may not always offer a highly competitive trading market.

Auction-Rate Preferred Stock Offers Competitive Rates of Return with Traditional