Use italics for the names of genera, subgenera, species, and _______________

An investor is faced with the decision of whether to invest in a stock with an expected return of 14% or a stock in the same industry with an expected 20% return. Which of the following seems most likely?

A) the 20% stock is a better investment. B) Both stocks are priced correctly given their perceived risk. C) the 14% stock is overpriced. D) Both stocks will have approximately the same return.

(I) Preferred stockholders hold a claim on assets that has priority over the claims of common stockholders, but after that of bondholders

(II) Firms issue preferred stock in far greater amounts than common stock. A) (I) is true, (II) false. B) (I) is false, (II) true. C) Both are true. D) Both are false.