SIE Mastery Exam 1 Review Questions With Verified And Updated Solutions.

SIE Mastery Exam 1 Review Questions With Verified And Updated Solutions. ABC gold mining company has issued a preferred stock. Dividends on the issue may be paid as: - answerCash only A customer buys 100 shares of preferred at $101 per share. The par value is $100. The dividend rate is 8%. Each dividend payment will be: - answer$400 If interest rates fall, issuers most likely will call: (missed twice) - answerpreferred issues with above market interest rates During a period of stable interest rates, which type of preferred stock would show the greatest price volatility - answerParticipating Which statement is BEST regarding participating preferred stock? - answerThe dividend rate is fixed to minimum but not as to maximum A customer owns 256 shares of ABC common stock. ABC declares a rights offering, with the terms being that for every 15 rights tendered, a shareholder may purchase one additional share at $24 per share. Any fractional rights holding may be rounded up to buy an additional share. If this shareholder wishes to subscribe, which statement is TRUE? - answerThe shareholder can buy a maximum of 18 shares by paying $432 At issuance, the exercise of a warrant is set at: - answera premium to the current market price of that issuer's common stock All of the following statements regarding warrants are true EXCEPT? A. Warrants generally have a life of 5 years or less B. At issuance, the exercise price of the warrant is set higher than the current market price of the underlying common stock C. The price of the warrant will vary with the price movements of the underlying stock D. The warrant is not a tradable security - answerD. The warrant is not a tradable security Which of the following statements about warrants are TRUE? (3 statements) - answerWarrant valuation reflects market expectations for future earnings of the company Warrants give the holder the long term option to buy stock Warrants have no intrinsic value but significant time value The essential difference between a sponsored and unsponsored ADR is: - answerIssuer sponsorship Which of the following pay quarterly dividends? A. ADRs B. Bonds C. Preferred stock D. Rights - answerD. Rights What term would apply to Authorized Stock? - answerPar Value A proxy given to a caretaker to vote a stockholder's share is a: - answerpower of attorney The bondholder of a municipal bond issue is the: - answerlender of the bond proceeds Which of the following are due interest from the corporation? A. Common Shareholders B. Convertible Bondholders C. Preferred Shareholders D. Warrant Holders - answerB. Convertible Bondholders Bonds quoted on a yield to maturity basis are generally: - answerserial bonds An investor buys a bond at a discount. Later in the year, the bond is trading at a premium. This is termed: - answerAppreciation