Question 6 10 points Which one of the following statements i

Question 6 (10 points) Which one of the following statements is correct? 1) The NYSE is a dealer market. 2) Preferred shareholders have the right to elect a director under cumulative voting. 3) The total return is equal to the capital gains yield minus the dividend yield 4) If you sell a stock to a dealer you will receive the bid price

Solution

1) Dealer Market is a market where each transaction is carried out by buyers and sellers through dealers and buyers and sellers don\'t buy or sell from each other. In the case of NYSE buyers and sellers directly buy or sell to each other. Therefore NYSE is not a dealers market.

2) Preferred dealers, in any case, do not have the right to vote

3) Total return is the sum of capital yield and dividend yield.

4) The bid price is the price at which market participants are willing to buy and ask price is the price at which sellers are willing to sell. Therefore by selling a stock on is expected to receive ask price.

Hence option (3) is correct.