Question X7BG3-H4KKM, two correct answer choices?

FINRA FINRA Series 7
1

Hi there,

The question asks which is true for preferred stocks if between two different choices that are very similar one is convertible and one is not. However, the answer options have 2 correct choices:

The non-convertible security will likely trade at a lower market price
The convertible security will likely trade at a lower yield

Both answers imply the same fact that convertibles will have a higher price/lower yield than non convertibles. Or the vice versa that non-convertibles have a lower price/higher yield. Or am I missing something?

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2

Thanks for pointing this out, @Vivid_coffee_flyingf! This was a typo on our side, which we’re correcting right now. You’re exactly right… non-convertible securities trade at lower market prices (they’re not as high in demand as convertible securities), and convertible securities will trade at lower yields (because their market prices are higher due to demand as opposed to non-convertible securities).

We appreciate you letting us know!

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