1 for specific request mail
FINRA SIE Exam Questions and Correct Answers |
Latest Update
If interest Rates fall the issuer will most likely call which bonds first?
Ans: High Dividend Rate preferred issues trading at a premium
What are some actions by a corporation will affect an individuals
common shareholder's equity
Ans: Conversion of convertible preferred stocks or bond
Assignment Expert
Repurchase of common shares
Issuance of additional common shares
Guru01 - Stuvia
(Stock splits do not effect shareholders equity but it must be voted on
because it effects Par Value)
2026
Benefits to a Convertible stock compared to a regular debenture
Ans: 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?
Ans: Can be callable by issuer, both have periodic payments. Both are
senior securities to common stock.
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.
, 2 for specific request mail
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?
Ans: 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
Assignment Expert
be rounded up to buy an additional share.
How many shares may the customer buy with these right?
Guru01 - Stuvia
Ans: 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.
2026
XXYZ ADR (American Depository Receipt) represents 10% of the value of
©
an XXYZ ordinary share. The ordinary shares trade on 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?
Ans: 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?
, 3 for specific request mail
Performance of stock?
Inflation?
Interest rates?
Ans: 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.
Rights are?
Assignment Expert
Ans: Exerciserable, Negotiable (can be traded), Giftable
Guru01 - Stuvia
Dividends can be paid in the form of?
Ans: Cash or products
2026
Additional shares of ANOTHER company (yes another company)
Additional shares of that company
©
NOT Options and Not Tax deferments
Preferred Stock is?
Ans: 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..
Ans: Debenture
Trades of all of the following will settle in Fed Funds Except?
1) US Treasury Bonds
FINRA SIE Exam Questions and Correct Answers |
Latest Update
If interest Rates fall the issuer will most likely call which bonds first?
Ans: High Dividend Rate preferred issues trading at a premium
What are some actions by a corporation will affect an individuals
common shareholder's equity
Ans: Conversion of convertible preferred stocks or bond
Assignment Expert
Repurchase of common shares
Issuance of additional common shares
Guru01 - Stuvia
(Stock splits do not effect shareholders equity but it must be voted on
because it effects Par Value)
2026
Benefits to a Convertible stock compared to a regular debenture
Ans: 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?
Ans: Can be callable by issuer, both have periodic payments. Both are
senior securities to common stock.
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.
, 2 for specific request mail
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?
Ans: 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
Assignment Expert
be rounded up to buy an additional share.
How many shares may the customer buy with these right?
Guru01 - Stuvia
Ans: 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.
2026
XXYZ ADR (American Depository Receipt) represents 10% of the value of
©
an XXYZ ordinary share. The ordinary shares trade on 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?
Ans: 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?
, 3 for specific request mail
Performance of stock?
Inflation?
Interest rates?
Ans: 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.
Rights are?
Assignment Expert
Ans: Exerciserable, Negotiable (can be traded), Giftable
Guru01 - Stuvia
Dividends can be paid in the form of?
Ans: Cash or products
2026
Additional shares of ANOTHER company (yes another company)
Additional shares of that company
©
NOT Options and Not Tax deferments
Preferred Stock is?
Ans: 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..
Ans: Debenture
Trades of all of the following will settle in Fed Funds Except?
1) US Treasury Bonds
