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FINRA SIE Actual Practice Questions 2026/2027 –
Multiple Choice Test with Answers for Exam Readiness
| pdf
If interest Rates fall the issuer will most likely call which bonds
first? - ..ANSWER...✓✓ High Dividend Rate preferred issues
trading at a premium
What are some actions by a corporation will affect an
individuals common shareholder's equity - ..ANSWER...✓✓
Conversion of convertible preferred stocks or bond
Repurchase of common shares
Issuance of additional common shares
(Stock splits do not effect shareholders equity but it must be
voted on because it effects Par Value)
Benefits to a Convertible stock compared to a regular debenture
- ..ANSWER...✓✓ Convertible stock will have a slightly lower
yield than non-convertible however it will raise in value as the
market price of common stock rises
What traits do preferred stock and bonds have in common? How
are they different? - ..ANSWER...✓✓ Can be callable by issuer,
both have periodic payments. Both are senior securities to
common stock.
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Neither have voting rights
Preferred is paid dividends on a percentage of face value much
like the yield of a bond.
Preferred stock has no maturity date and can be held
perpetually while bonds have a set maturity date.
Payments to preferred stock are not mandatory unless a
declared dividend has been issued to common stock
Payments to bond holders are mandatory
When are common dividends declared and paid? -
..ANSWER...✓✓ Quarterly for both
A customer owns 256 shares of ABC common stock. ABC declares
a rights offering, with the terms being that for every 15 rights a
shareholder may purchase one additional share.at $24 a share.
Any fractional rights may be rounded up to buy an additional
share.
How many shares may the customer buy with these right? -
..ANSWER...✓✓ A share holder can buy a maximum of 18
shares with these rights paying $432 for them.
The 17.06 shares may be rounded up to 18.
XXYZ ADR (American Depository Receipt) represents 10% of the
value of an XXYZ ordinary share. The ordinary shares trade on
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the London Stock Exchange, where the current price is 400 British
Pounds (BP). The current exchange rate for the British Pound
against the US Dollar is $1.40. The ordinary share pays an
annualized dividend of 12 BP. The XXYZ ADR is listed on the
NYSE. If a customer places an order to buy $560,000 of the
ADR on the customer will buy how many shares of the ADR? -
..ANSWER...✓✓ 10,000 Shares with $560.,000
Explanation
400 BP x $1.4 = 560
$560, BP/share = 10,000 Shares of XXYZ
Preferred Stock market valuation is based primarily on what?
Performance of stock?
Inflation?
Interest rates? - ..ANSWER...✓✓ Interest Rates is the correct
answer, remember that preferred stock is much like a bond in
that it has fixed payments and is considered fixed income.
Long term market interest rate levels determine the valuation.
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Rights are? - ..ANSWER...✓✓ Exerciserable, Negotiable (can
be traded), Giftable
Dividends can be paid in the form of? - ..ANSWER...✓✓ Cash
or products
Additional shares of ANOTHER company (yes another company)
Additional shares of that company
NOT Options and Not Tax deferments
Preferred Stock is? - ..ANSWER...✓✓ Performance based,
participating, cumulative (dividends)
It is not refundable or redeemable
A corporate bond which is backed solely by full faith and credit
of the issuer.. - ..ANSWER...✓✓ Debenture
Trades of all of the following will settle in Fed Funds Except?
1) US Treasury Bonds
2) Treasury Bills
3) Prime Commercial Paper
FINRA SIE Actual Practice Questions 2026/2027 –
Multiple Choice Test with Answers for Exam Readiness
If interest Rates fall the issuer will most likely call which bonds
first? - ..ANSWER...✓✓ High Dividend Rate preferred issues
trading at a premium
What are some actions by a corporation will affect an
individuals common shareholder's equity - ..ANSWER...✓✓
Conversion of convertible preferred stocks or bond
Repurchase of common shares
Issuance of additional common shares
(Stock splits do not effect shareholders equity but it must be
voted on because it effects Par Value)
Benefits to a Convertible stock compared to a regular debenture
- ..ANSWER...✓✓ Convertible stock will have a slightly lower
yield than non-convertible however it will raise in value as the
market price of common stock rises
What traits do preferred stock and bonds have in common? How
are they different? - ..ANSWER...✓✓ Can be callable by issuer,
both have periodic payments. Both are senior securities to
common stock.
,2|Page
Neither have voting rights
Preferred is paid dividends on a percentage of face value much
like the yield of a bond.
Preferred stock has no maturity date and can be held
perpetually while bonds have a set maturity date.
Payments to preferred stock are not mandatory unless a
declared dividend has been issued to common stock
Payments to bond holders are mandatory
When are common dividends declared and paid? -
..ANSWER...✓✓ Quarterly for both
A customer owns 256 shares of ABC common stock. ABC declares
a rights offering, with the terms being that for every 15 rights a
shareholder may purchase one additional share.at $24 a share.
Any fractional rights may be rounded up to buy an additional
share.
How many shares may the customer buy with these right? -
..ANSWER...✓✓ A share holder can buy a maximum of 18
shares with these rights paying $432 for them.
The 17.06 shares may be rounded up to 18.
XXYZ ADR (American Depository Receipt) represents 10% of the
value of an XXYZ ordinary share. The ordinary shares trade on
,3|Page
the London Stock Exchange, where the current price is 400 British
Pounds (BP). The current exchange rate for the British Pound
against the US Dollar is $1.40. The ordinary share pays an
annualized dividend of 12 BP. The XXYZ ADR is listed on the
NYSE. If a customer places an order to buy $560,000 of the
ADR on the customer will buy how many shares of the ADR? -
..ANSWER...✓✓ 10,000 Shares with $560.,000
Explanation
400 BP x $1.4 = 560
$560, BP/share = 10,000 Shares of XXYZ
Preferred Stock market valuation is based primarily on what?
Performance of stock?
Inflation?
Interest rates? - ..ANSWER...✓✓ Interest Rates is the correct
answer, remember that preferred stock is much like a bond in
that it has fixed payments and is considered fixed income.
Long term market interest rate levels determine the valuation.
, 4|Page
Rights are? - ..ANSWER...✓✓ Exerciserable, Negotiable (can
be traded), Giftable
Dividends can be paid in the form of? - ..ANSWER...✓✓ Cash
or products
Additional shares of ANOTHER company (yes another company)
Additional shares of that company
NOT Options and Not Tax deferments
Preferred Stock is? - ..ANSWER...✓✓ Performance based,
participating, cumulative (dividends)
It is not refundable or redeemable
A corporate bond which is backed solely by full faith and credit
of the issuer.. - ..ANSWER...✓✓ Debenture
Trades of all of the following will settle in Fed Funds Except?
1) US Treasury Bonds
2) Treasury Bills
3) Prime Commercial Paper
