A brief overview of auction preferreds: when the shares are first offered, the investorspecifies their desired dividend rate and the number of shares he or she wishes topurchase. bids are submitted and if the desired rate is accepted at auction, theinvestor receives the minimum rate that was needed to clear the auction i.e., thelowest rate that was bid that finished the purchase of all the shares would be the ratethat each investor would subsequently receive. at subsequent auctions, theshareholder has a couple of choices:-sell the shares and close the position;-hold the shares and accept the new rate established by the auction-hold at the rate he or she originally purchased. if this is the choice made by theinvestor, the shares can be held only if the investors desired rate is at or below thenew auction rate. if the investors desired rate is not reached in the auction, the sharesare automatically sold in the market.the shareholder can instruct his or her broker to sell their shares at the next scheduledauction date for their series of preferred shares the new rate is established at thenext auction date, based on all shares that are up for auction.