Question: What are the differences between common stock and preferred stock? Why might the Standard & Poor's 500 Index be a better measure of stock market

What are the differences between common stock and preferred stock?
Why might the Standard & Poor's 500 Index be a better measure of stock market performance than the Dow Jones Industrial Average? Why is the DJIA more popular than the S&P 500?
Explain the characteristics of preferred stock.
Consider two firms with the same P/E ratio. Explain how one could be described as expensive compared to the other.
Explain how the difference in the bid and ask prices might be considered a hidden cost to the investor.

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