Note: For Spring 2020, this chapter is optional.

There are three questions on exam #4 for chapter 18. The three questions and their answers are in the weekly announcements. Please have them handy when you take exam #4. We making this chapter optional for Spring 2020 because we are week behind because of the turmoil and also because hybrid securities simply aren't that important for the vast majority of us retail investors.

In the Chapter 18 module, you will

Be introduced to the two major forms of hybrid securities, preferred stock and convertible securities
Examine the advantages and disadvantages of preferred stocks and convertible securities

By the end of this module, you should be able to

Identify the advantages and disadvantages of preferred stock and convertible securities
Describe the main reason that preferred stock is most likely owned by corporations instead of retail investors
Calculate the various measures of convertible securities

Presentation File and Study Guide

Presentation file - Study guide

Hybrid Securities - Preferred Stock and Convertible Securities

In a backwater of the investment universe rarely visited by retail investors lives a group of instruments known as hybrid securities. It is very unlikely that you as an individual retail investor will choose hybrid securities as part of your investment portfolio but you never know. You may be drawn to these instruments. At the very least, you need to be ab9le to explain the inherent problems with these choices for retail investors to your brother-in-law who is all excited about buying preferred stock instead of just plain old common stock.

Video - Video (CC) - Audio - Youtube

It is time to tackle the chapter 18 worksheet! See you on the next screen.