FINRA – SIE Verified Multiple Choice and
Conceptual Actual Emended Exam Questions
With Reviewed 100% Correct Detailed Answers
Guaranteed Pass!!Current Update!!
1. If interest rates fall, the issuer will most likely call which bonds or preferred stock first?
A. Low coupon bonds trading at a discount
B. High dividend preferred stock trading at a premium
C. Zero-coupon bonds
D. Convertible bonds
2. Which of the following actions will reduce common shareholders’ equity?
A. Issuance of additional common shares
B. Stock split
C. Repurchase of common shares
D. Conversion of bonds into stock
3. Stock splits:
A. Must be voted on by shareholders
B. Affect shareholders’ equity directly
C. Change retained earnings
D. Change the company’s total market value
4. Convertible bonds generally have:
A. Higher yields than non-convertibles
B. Lower yields than non-convertibles
C. Equal yields
D. No relationship to yields
,5. Which feature is true of both preferred stock and bonds?
A. Both have voting rights
B. Both can be callable by the issuer
C. Both have maturity dates
D. Both dividends/interest payments are mandatory
6. Which statement is true of preferred stock payments?
A. They are mandatory like bond interest
B. They are optional unless declared
C. They accrue automatically if missed
D. They are guaranteed under SIPC
7. A corporation pays dividends on common stock how often?
A. Annually
B. Semiannually
C. Quarterly
D. Monthly
8. A customer owns 300 shares of stock. In a rights offering, they receive 1 right per share, and
15 rights are needed to buy 1 new share. How many new shares can be purchased?
A. 15
B. 20
C. 25
D. 30
9. The market value of preferred stock is most influenced by:
A. Corporate earnings
B. Interest rates
C. Inflation only
D. The issuer’s par value
10. Rights are:
A. Negotiable
,B. Non-tradable
C. Expire after 10 years
D. Equivalent to warrants
11. A stock right gives the holder the ability to:
A. Convert preferred to common
B. Purchase stock below market price
C. Vote on corporate governance
D. Force redemption of shares
12. Warrants differ from rights in that they:
A. Are short-term
B. Are issued at par
C. Have longer terms than rights
D. Are not tradable
13. An ADR represents:
A. A U.S. company’s stock listed abroad
B. A foreign company’s stock trading in U.S. markets
C. A bond issued in multiple currencies
D. A mutual fund of foreign securities
14. Which of the following is a risk of ADRs?
A. Liquidity risk
B. Political risk
C. Currency exchange risk
D. Call risk
15. ADR dividends are paid in:
A. Foreign currency
B. U.S. dollars
C. Euros
D. Yen
, 16. If a company declares a 2-for-1 stock split, a shareholder with 100 shares will now own:
A. 50 shares
B. 100 shares
C. 200 shares
D. 400 shares
17. After a 2-for-1 stock split, the par value of a $10 par stock becomes:
A. $20
B. $5
C. $2
D. $1
18. A reverse stock split:
A. Decreases market price per share
B. Increases earnings per share
C. Increases number of shares outstanding
D. Increases shareholder equity
19. Which security has the highest claim on assets in liquidation?
A. Common stock
B. Preferred stock
C. Bonds
D. Warrants
20. Cumulative preferred stockholders:
A. Receive dividends first
B. Accumulate unpaid dividends
C. Have voting rights
D. Are guaranteed dividends
Conceptual Actual Emended Exam Questions
With Reviewed 100% Correct Detailed Answers
Guaranteed Pass!!Current Update!!
1. If interest rates fall, the issuer will most likely call which bonds or preferred stock first?
A. Low coupon bonds trading at a discount
B. High dividend preferred stock trading at a premium
C. Zero-coupon bonds
D. Convertible bonds
2. Which of the following actions will reduce common shareholders’ equity?
A. Issuance of additional common shares
B. Stock split
C. Repurchase of common shares
D. Conversion of bonds into stock
3. Stock splits:
A. Must be voted on by shareholders
B. Affect shareholders’ equity directly
C. Change retained earnings
D. Change the company’s total market value
4. Convertible bonds generally have:
A. Higher yields than non-convertibles
B. Lower yields than non-convertibles
C. Equal yields
D. No relationship to yields
,5. Which feature is true of both preferred stock and bonds?
A. Both have voting rights
B. Both can be callable by the issuer
C. Both have maturity dates
D. Both dividends/interest payments are mandatory
6. Which statement is true of preferred stock payments?
A. They are mandatory like bond interest
B. They are optional unless declared
C. They accrue automatically if missed
D. They are guaranteed under SIPC
7. A corporation pays dividends on common stock how often?
A. Annually
B. Semiannually
C. Quarterly
D. Monthly
8. A customer owns 300 shares of stock. In a rights offering, they receive 1 right per share, and
15 rights are needed to buy 1 new share. How many new shares can be purchased?
A. 15
B. 20
C. 25
D. 30
9. The market value of preferred stock is most influenced by:
A. Corporate earnings
B. Interest rates
C. Inflation only
D. The issuer’s par value
10. Rights are:
A. Negotiable
,B. Non-tradable
C. Expire after 10 years
D. Equivalent to warrants
11. A stock right gives the holder the ability to:
A. Convert preferred to common
B. Purchase stock below market price
C. Vote on corporate governance
D. Force redemption of shares
12. Warrants differ from rights in that they:
A. Are short-term
B. Are issued at par
C. Have longer terms than rights
D. Are not tradable
13. An ADR represents:
A. A U.S. company’s stock listed abroad
B. A foreign company’s stock trading in U.S. markets
C. A bond issued in multiple currencies
D. A mutual fund of foreign securities
14. Which of the following is a risk of ADRs?
A. Liquidity risk
B. Political risk
C. Currency exchange risk
D. Call risk
15. ADR dividends are paid in:
A. Foreign currency
B. U.S. dollars
C. Euros
D. Yen
, 16. If a company declares a 2-for-1 stock split, a shareholder with 100 shares will now own:
A. 50 shares
B. 100 shares
C. 200 shares
D. 400 shares
17. After a 2-for-1 stock split, the par value of a $10 par stock becomes:
A. $20
B. $5
C. $2
D. $1
18. A reverse stock split:
A. Decreases market price per share
B. Increases earnings per share
C. Increases number of shares outstanding
D. Increases shareholder equity
19. Which security has the highest claim on assets in liquidation?
A. Common stock
B. Preferred stock
C. Bonds
D. Warrants
20. Cumulative preferred stockholders:
A. Receive dividends first
B. Accumulate unpaid dividends
C. Have voting rights
D. Are guaranteed dividends
