Preferred stock is the least used of all long-term corporate securities.

The Nasdaq tends to be preferred by younger growth companies, while the NYSE is chosen by more established companies.

Derivatives cannot be used for hedging against potential price changes.

Bond markets tend to be more formalized than stock markets.

The most liquid securities in the world are U.S. Treasury securities.

The capital budgeting decisions of a firm will have no effect on the share price of the common stock.

The term risk-averse means that

Investment A has a higher standard deviation than investment B and thus has greater volatility.

In order to evaluate risk, management may also set qualitative risk classes. Rank these four projects from least risky to most risky, all other things being equal.

1. Completely new market in United States.
2. Completely new market in South America.
3. Addition to normal product line.
4. Repair to old machinery.

Using the risk-adjusted discount rate approach, the firm's weighted average cost of capital is applied to projects with