Assume the securities are all issued by the same firm. from the investor's standpoint, rank the following securities in order of increasing risk (the number of the least risky security is placed first, or to the left, in the answer set).
(1) preferred stock.
(2) income bonds.
(3) convertible preferred stock.
(4) mortgage bonds.

a. 1, 2, 3, 4
b. 4, 1, 2, 3
c. 4, 1, 3, 2
d. 4, 2, 1, 3
e. 4, 2, 3, 1

Many potential buyers value high-quality used cars at the full-information market price of € p1 and lemons at € p2. a limited number of potential sellers value high-quality cars at € v1 ≤ p1 and lemons at € v2 ≤ p2. everyone is risk neutral. the share of lemons among all the used cars that might be potentially sold is € θ . suppose that the buyers incur a transaction cost of $200 to purchase a car. this transaction cost is the value of their time to find a car. what is the equilibrium? is it possible that no cars are sold