FINRA SIE EXAMS WITH CORRECT -
SOLUTIONS GRADED A+ /PRACTICE
TEST/2026 UPDATED
1. If interest Rates fall the issuer will most likely call
which bonds first? - -ANS☑️☑️--High Dividend Rate preferred
issues trading at a premium
2. What are some actions by a corporation will affect an
individuals common shareholder's equity - -ANS☑️☑️--
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)
3. 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
4. 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.
, Payments to preferred stock are not mandatory unless a
declared dividend has been issued to common stock
Payments to bond holders are mandatory
5. When are common dividends declared and paid? - -ANS☑️☑️--
Quarterly for both
6. 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.
7. How many shares may the customer buy with these right? - -
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.
8. 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?
Performance of stock?
Inflation?
9. Interest rates? - -ANS☑️☑️--Interest Rates is the correct -
ANS☑️☑️-, 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.
10. Rights are? - -ANS☑️☑️--Exerciserable, Negotiable (can
be traded), Giftable
11. Dividends can be paid in the form of? - -ANS☑️☑️--Cash
or products
Additional shares of ANOTHER company (yes another company)
Additional shares of that company
12. NOT Options and Not Tax deferments
13. Preferred Stock is? - -ANS☑️☑️--Performance based,
participating, cumulative (dividends)
14. It is not refundable or redeemable
SOLUTIONS GRADED A+ /PRACTICE
TEST/2026 UPDATED
1. If interest Rates fall the issuer will most likely call
which bonds first? - -ANS☑️☑️--High Dividend Rate preferred
issues trading at a premium
2. What are some actions by a corporation will affect an
individuals common shareholder's equity - -ANS☑️☑️--
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)
3. 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
4. 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.
, Payments to preferred stock are not mandatory unless a
declared dividend has been issued to common stock
Payments to bond holders are mandatory
5. When are common dividends declared and paid? - -ANS☑️☑️--
Quarterly for both
6. 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.
7. How many shares may the customer buy with these right? - -
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.
8. 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?
Performance of stock?
Inflation?
9. Interest rates? - -ANS☑️☑️--Interest Rates is the correct -
ANS☑️☑️-, 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.
10. Rights are? - -ANS☑️☑️--Exerciserable, Negotiable (can
be traded), Giftable
11. Dividends can be paid in the form of? - -ANS☑️☑️--Cash
or products
Additional shares of ANOTHER company (yes another company)
Additional shares of that company
12. NOT Options and Not Tax deferments
13. Preferred Stock is? - -ANS☑️☑️--Performance based,
participating, cumulative (dividends)
14. It is not refundable or redeemable
