Series 7 - Security & Equity Exam
2025 Questions and Answers
A stock split - ANSWER✔✔-results in more outstanding shares at a lower par value per
share. (like have 2 nickels instead of 1 dime)
a 5:4 stock split will result in - ANSWER✔✔-each shareholder's proportionate equity
will be unchanged - Since each shareholder will receive additional stock, the
proportional equity will remain the same.
A change in earnings would affect the price of security the most? - ANSWER✔✔-
Common stock - as owners, common shareholders have a claim on the earnings of the
firm. (junior security)
a 2-for-1 stock split - ANSWER✔✔-the share price is reduced by half, the number of
shares doubles
The rate on an adjustable preferred stock may be indexed to the - ANSWER✔✔-
Treasury bill rate
Stock undergoes a 1-5 reverse split, which increases? - ANSWER✔✔-Market price per
share and earnings per share
Statutory voting - ANSWER✔✔-stockholder owns 200 shares of common stock, 6
candidates, 3 seats: could cast votes 200 votes for each of 3 directors
Corporations must have stockholder approval to - ANSWER✔✔-issue convertible
bonds
Decisions made by the BOD that do not require stockholder vote include: -
ANSWER✔✔--Repurchase of stock for its treasury
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
2025 Questions and Answers
A stock split - ANSWER✔✔-results in more outstanding shares at a lower par value per
share. (like have 2 nickels instead of 1 dime)
a 5:4 stock split will result in - ANSWER✔✔-each shareholder's proportionate equity
will be unchanged - Since each shareholder will receive additional stock, the
proportional equity will remain the same.
A change in earnings would affect the price of security the most? - ANSWER✔✔-
Common stock - as owners, common shareholders have a claim on the earnings of the
firm. (junior security)
a 2-for-1 stock split - ANSWER✔✔-the share price is reduced by half, the number of
shares doubles
The rate on an adjustable preferred stock may be indexed to the - ANSWER✔✔-
Treasury bill rate
Stock undergoes a 1-5 reverse split, which increases? - ANSWER✔✔-Market price per
share and earnings per share
Statutory voting - ANSWER✔✔-stockholder owns 200 shares of common stock, 6
candidates, 3 seats: could cast votes 200 votes for each of 3 directors
Corporations must have stockholder approval to - ANSWER✔✔-issue convertible
bonds
Decisions made by the BOD that do not require stockholder vote include: -
ANSWER✔✔--Repurchase of stock for its treasury
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
