Certified Senior Advisor (CSA) Practice Test

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Question: 1 / 400

Which type of stock typically represents ownership of a company but usually does not carry voting rights?

Common stock

Convertible stock

Preferred stock

Preferred stock is typically the correct answer because it represents ownership in a company but generally does not carry the same voting rights as common stock. Holders of preferred stock typically receive fixed dividends before common stockholders receive any dividends, making it more structured in terms of income generation. This type of stock is often attractive to investors who prioritize steady income over participation in corporate governance. Common stock, in contrast, usually comes with voting rights, allowing shareholders to influence company decisions. Convertible stock refers to shares that can be converted into a different type of stock, and growth stock refers to shares in companies expected to grow at an above-average rate compared to their industry. These two types focus more on investment opportunities and potential future appreciation rather than the specific rights associated with ownership.

Certified Senior Advisor (CSA) Practice Test

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