FBLA REVISION MOCK EXAM PAPER 2025/2026
(QUESTIONS WITH 100% CORRECT
Common stock - the most "junior security" because it ranks last in line at liquidation. An equity or
ownership position that usually allows the owner to vote on major corporate issues such as stock
splits, mergers, acquisitions, authorizing more shares, etc.
Transfer agent - issues and redeems certificates. Handles name changes, validates mutilated
certificates. Distributes dividends, gains, and and shareholder reports to mutual fund investors.
registrar - audits the transfer agent to make sure the number of authorized shares is never exceeded
dividends - money paid from profits to holders of common and preferred stock whenever the Board
of Directors is feeling especially generous
Declaration date - the date the Board of Directors declares a dividend
Record date - the date determined by the Board of Directors upon which the investor must be the
"holder of record" in order to receive the upcoming dividend. Settlement of a trade must occur by
the record date for the buyer to receive the dividend
payable date - the date that the dividend check is paid to investors
regular way settlement - T + 3, trade plus three business days. T + 1 for Treasury securities
T + 3 - regular way settlement, trade date plus three business days
Ex-Date - two days before the Record Date of corporate stock. The date upon which the buyer is not
entitled to the upcoming dividend. Note that for mutual funds, this date is established by the Board
of Directors, usually the day after the Record Date
Pre-emptive right - the right of common stockholders to maintain their proportional ownership if the
company offers more shares of stock
, subscription right - the securities used in additional offerings of stock to purchase available shares,
usually at a slight discount
warrant - long term equity securities giving the owner the right to purchase stock at a set price.
OFten attached as a "sweetener" that makes the other security more attractive
currency exchange risk - the risk that the value of the U.S. dollar versus another currency will have a
negative impact on businesses and investors.
option - a derivative giving the holder the right to buy or sell something for a stated price up to
expiration of the contract. Puts and calls
bullish - an investor who takes a position based on the belief that the market or a particular security
will rise. Buyers of stock and call options
bearish - an investor who takes a position based on the belief that the market or a particular security
will fall. sellers of stock and buyers of put options
preferred stock - a fixed-income security whose stated dividends must be paid before common stock
can receive any dividend payment. Also gets preference ahead of common stock in a liquidation (but
behind all bonds and general creditors)
fixed-income security - a security promising a fixed rate of interest or dividends.
straight preferred stock - a preferred stock whose missed dividends do not go into arrears, a.k.a.
"non-cumulative preferred."
cumulative preferred stock - preferred stock where missed dividends go into arrears and must be
paid before the issuer may pay dividends to other preferred stock and/or common stock
participating preferred stock - preferred stock whose dividend is often raised above the stated rate
convertible preferred stock - a preferred stock or corporate bond allowing the investor to use the par
value to "buy" shares of the company's common stock at a set price
(QUESTIONS WITH 100% CORRECT
Common stock - the most "junior security" because it ranks last in line at liquidation. An equity or
ownership position that usually allows the owner to vote on major corporate issues such as stock
splits, mergers, acquisitions, authorizing more shares, etc.
Transfer agent - issues and redeems certificates. Handles name changes, validates mutilated
certificates. Distributes dividends, gains, and and shareholder reports to mutual fund investors.
registrar - audits the transfer agent to make sure the number of authorized shares is never exceeded
dividends - money paid from profits to holders of common and preferred stock whenever the Board
of Directors is feeling especially generous
Declaration date - the date the Board of Directors declares a dividend
Record date - the date determined by the Board of Directors upon which the investor must be the
"holder of record" in order to receive the upcoming dividend. Settlement of a trade must occur by
the record date for the buyer to receive the dividend
payable date - the date that the dividend check is paid to investors
regular way settlement - T + 3, trade plus three business days. T + 1 for Treasury securities
T + 3 - regular way settlement, trade date plus three business days
Ex-Date - two days before the Record Date of corporate stock. The date upon which the buyer is not
entitled to the upcoming dividend. Note that for mutual funds, this date is established by the Board
of Directors, usually the day after the Record Date
Pre-emptive right - the right of common stockholders to maintain their proportional ownership if the
company offers more shares of stock
, subscription right - the securities used in additional offerings of stock to purchase available shares,
usually at a slight discount
warrant - long term equity securities giving the owner the right to purchase stock at a set price.
OFten attached as a "sweetener" that makes the other security more attractive
currency exchange risk - the risk that the value of the U.S. dollar versus another currency will have a
negative impact on businesses and investors.
option - a derivative giving the holder the right to buy or sell something for a stated price up to
expiration of the contract. Puts and calls
bullish - an investor who takes a position based on the belief that the market or a particular security
will rise. Buyers of stock and call options
bearish - an investor who takes a position based on the belief that the market or a particular security
will fall. sellers of stock and buyers of put options
preferred stock - a fixed-income security whose stated dividends must be paid before common stock
can receive any dividend payment. Also gets preference ahead of common stock in a liquidation (but
behind all bonds and general creditors)
fixed-income security - a security promising a fixed rate of interest or dividends.
straight preferred stock - a preferred stock whose missed dividends do not go into arrears, a.k.a.
"non-cumulative preferred."
cumulative preferred stock - preferred stock where missed dividends go into arrears and must be
paid before the issuer may pay dividends to other preferred stock and/or common stock
participating preferred stock - preferred stock whose dividend is often raised above the stated rate
convertible preferred stock - a preferred stock or corporate bond allowing the investor to use the par
value to "buy" shares of the company's common stock at a set price
