Question: 1. What is default risk, how is it measured, and how does it impact bond values? 2. Describe three optional features of bonds (e.g. call

1. What is default risk, how is it measured, and how does it impact bond values?

2. Describe three optional features of bonds (e.g. call provision) and how they impact bond value.

3. Explain why the value of a share of stock does not depend on how long you plan to hold the stock.

4. Explain the difference between preferred stock and common stock.

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