Series 65: 2.3.4 Trading Preferred Stock

2.3.4  Trading Preferred Stock

Preferred stocks trade in the secondary market; however, for most types of preferred stock, price fluctuations are caused by changing interest rates rather than increases and decreases in company earnings. As with bonds, the market price of preferred stock generally rises when interest rates fall, and falls when interest rates rise. When interest rates fall, the market price of the preferred stock w