Similar to bond investments, preferred shares can be __________, meaning the firm may buy them back.Multiple Choiceretroactiveresponsivecallablecumulative

The correct answer is callable.

Explanation

1. Callable Preferred Shares: These are a type of preferred stock that gives the issuing company the right to buy back the shares at a specified price after a certain date. This feature allows the company to manage its capital structure effectively, especially if interest rates decline and it can refinance at a lower cost.

2. Other Options:

   • Retroactive generally refers to something taking effect from a date in the past; not applicable here.
   • Responsive is not a term commonly associated with preferred shares in the context of buybacks.
   • Cumulative refers to the right of shareholders to receive dividends that were omitted in the past, but it does not relate to the buyback feature.

In summary, "callable" is the correct term that describes preferred shares that the issuing firm may buy back.