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Equity Securities: 183 free SIE practice questions

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Which of the following rights is typically associated with common stock ownership?easy
A company with 1,000,000 shares outstanding plans to issue 200,000 new shares. An investor who owns 50,000 shares has preemptive rights.…medium
A cumulative preferred stock has a $4 annual dividend. The company skipped dividends for 2 years and now wants to pay common stock…medium
An investor holds participating preferred stock with a $5 stated dividend. After all preferred and common dividends are paid, the company…hard
In a corporate liquidation, which of the following has the HIGHEST priority claim on assets?easy
Which statement about stock rights (subscription rights) is TRUE?medium
How do warrants differ from stock rights?medium
What is an American Depositary Receipt (ADR)?easy
An investor who purchases ADRs is exposed to all of the following risks EXCEPT:medium
An investor owns 100 shares of stock and there are 3 board seats up for election. Under cumulative voting, how many total votes does the…hard
An investor holds convertible preferred stock with a conversion ratio of 4:1 (4 shares of common for each preferred share). If the…medium
Which of the following statements about common stock dividends is correct?easy
A callable preferred stock is MOST likely to be called by the issuer when:medium
An investor owns 200 shares of XYZ stock at $80 per share. After a 2-for-1 stock split, the investor will have:easy
Which type of preferred stock offers the LEAST interest rate risk?hard
A company has 50 million shares outstanding trading at $30 per share. What is its market capitalization?easy
All of the following are characteristics of stock rights EXCEPT:medium
Which statement about sponsored vs. unsponsored ADRs is TRUE?hard
Compared to common stock, preferred stock typically offers:easy
An existing shareholder is concerned about dilution of their ownership stake when a company issues new shares. Which feature would protect…medium
Treasury stock refers to shares that have been:medium
To receive a declared cash dividend, an investor must purchase the stock:easy
An investor in mortgage-backed securities (MBS) faces which unique risk when interest rates decline?medium
Which of the following is a money market instrument?easy
Commercial paper is typically issued by:medium
A banker's acceptance is primarily used to:hard
A Local Government Investment Pool (LGIP) is:hard
An Exchange-Traded Note (ETN) differs from an ETF primarily because an ETN:medium
Which of the following is true regarding ownership rights of common stockholders?easy
Which type of stock is typically eligible for dividend payments that are not guaranteed and may vary?easy
Preferred stock is called 'cumulative' because:easy
Shareholders are sometimes offered rights, which give them the ability to:easy
What is a typical right of common stockholders?easy
American Depositary Receipts (ADRs) allow U.S. investors to:easy
A warrant is best described as:easy
When a company declares a 2-for-1 stock split, what happens?easy
Book value of a company's stock is best described as:easy
Treasury stock refers to shares that:easy
Which feature allows a corporation to repurchase its preferred shares at a predetermined price?easy
Convertible preferred stock can be exchanged by the shareholder for:easy
Market capitalization is calculated by:easy
Participating preferred stock allows shareholders to:easy
The price-to-earnings (P/E) ratio is calculated by:easy
An investor owns 5% of a company’s shares. The company issues preemptive rights during a new offering. What is the purpose of these rights?medium
Which of the following is correct regarding cash dividends on common stock?medium
A company skips two years of dividend payments on its cumulative preferred stock. The next time it pays a dividend, which must occur?medium
A shareholder owns 100 shares at $60 each. After a 3-for-2 split, how many shares will the shareholder have and what will be the new share…medium
What is the status of voting rights and dividend eligibility for treasury stock?medium
An investor receives dividends on an ADR. What is a possible additional consideration compared to dividends from U.S. stocks?medium
A company issues warrants with a strike price above the current stock price. What is the primary reason an investor would purchase a…medium
If a company has $10 million in assets, $4 million in liabilities, and 1 million shares outstanding, what is the book value per share?medium
Which of the following is true for all types of preferred stock?medium
A common stockholder is voting for board members. Which voting method gives small shareholders more influence?medium
Rights are typically issued to existing shareholders in order to:medium
A company has 5 million shares outstanding at $20 per share. Its market capitalization is:medium
A company’s stock trades at $40, and earnings per share are $2. What is its P/E ratio?medium
Callable preferred stock exposes investors to which specific risk?medium
Common stockholders have which of the following rights?medium
Why might an investor choose convertible preferred stock?medium
Which statement about dividends is correct?medium
Compared to preferred stockholders, common stockholders:medium
Which is TRUE about warrants compared to rights?medium
A participating preferred shareholder receives:medium
How does a reverse stock split affect a shareholder’s total investment value?medium
A unique risk of owning an ADR compared to domestic stock is:medium
Which feature makes preferred stock more attractive when interest rates fall?medium
Which of the following best describes common stock's risk and return profile?medium
A convertible preferred stock with a $100 par value is convertible into 5 shares of common stock. If the common stock trades at $18, what…medium
The primary function of preemptive rights is to:medium
Which statement about rights and warrants is TRUE?medium
An investor must own stock by which date to receive a dividend?medium
A company has $100 million in assets, $40 million in liabilities, and 10 million common shares outstanding. Preferred stockholders have a…hard
If a company calls its preferred shares at a price above par and interest rates have dropped, which is likely true?hard
A company issues warrants at $20 when its stock is $16. After three years, the stock is $28. What is the intrinsic value of the warrant?hard
In a cumulative voting system, a shareholder with 200 shares and 4 director seats to vote on may cast how many votes for a single candidate?hard
A stock trades at $55 and has a P/E ratio of 11. What are the company’s earnings per share (EPS)?hard
Effects of repurchasing stock and holding it as treasury stock include:hard
A shareholder owns 150 shares of a company trading at $30. After a 5-for-3 split, how many shares will they own and what is the new share…hard
Which risk is unique to ADRs versus domestic stock?hard
A participating preferred shareholder will receive extra dividends if:hard
During bankruptcy, common stockholders:hard
A company offers rights to purchase shares at $22 when the market is $24. If a shareholder does not exercise, what happens?hard
Which scenario benefits holders of convertible preferred stock the most?hard
A company’s shares trade at $40. If it repurchases 500,000 of its 10 million outstanding shares, what is its new market capitalization?hard
Which of the following securities represents ownership in a corporation and grants voting rights to shareholders?easy
Which type of preferred stock allows unpaid dividends to accumulate and must be paid before common dividends?easy
Which statement best describes a cash dividend?easy
What do American Depositary Receipts (ADRs) allow U.S. investors to do?easy
Which of the following gives existing shareholders the opportunity to maintain their proportionate ownership in a company during a new…easy
How do stock warrants differ from stock rights?easy
After a 2-for-1 stock split, an investor who owned 100 shares at $50 per share will now own:easy
Why are preemptive rights issued to shareholders?easy
Shareholders can vote on which of the following corporate actions?easy
The book value of a company is best described as:easy
Market capitalization is determined by:easy
Convertible preferred stock gives the holder the right to:easy
Participating preferred stock provides the opportunity to:easy
A company may redeem (buy back) callable preferred stock:easy
A company with 1 million shares outstanding announces a 3-for-2 stock split. How many shares will be outstanding after the split?medium
A shareholder owns 200 shares of a company's common stock. In an election for three board members, if cumulative voting is used, what is…medium
Which risk is unique to holders of ADRs compared to holders of domestic U.S. stocks?medium
A company skips its preferred dividend payment for two years and then resumes payments. Which type of preferred shareholders will receive…medium
On the ex-dividend date, what adjustment typically occurs to the stock's price?medium
Which statement is TRUE regarding book value per share?medium
Shareholders receiving rights can do which of the following?medium
If a stock trades at $60 and has earnings per share of $4, what is its P/E ratio?medium
What happens to a company’s outstanding shares when it repurchases and holds treasury stock?medium
A warrant entitles a holder to:medium
Which of the following is a typical characteristic of preferred stock?medium
Which feature distinguishes callable preferred stock from other preferred stocks?medium
Which type of preferred stockholders can benefit if the company pays extra dividends?medium
Which of the following is TRUE about treasury stock?medium
Which statement is most accurate about stock rights?medium
A company declares a 10% stock dividend. If an investor owns 100 shares, how many additional shares will they receive?medium
If XYZ Corporation has 5 million shares outstanding and a current price of $20 per share, what is its market capitalization?medium
In the event of a corporate liquidation, which of the following holders is paid last?medium
Which of the following is a reason an investor might choose convertible preferred stock?medium
An investor in an ADR may receive dividends in which form?medium
Which of the following is NOT a right of common shareholders?medium
A company’s P/E ratio is often used by analysts to:medium
Warrants are often issued in connection with which type of securities to make them more attractive?medium
In a reverse 1-for-4 stock split, an investor holding 400 shares will now hold how many shares?medium
Why are preemptive rights valued by shareholders?medium
A potential disadvantage for holders of callable preferred stock is:medium
Which of the following statements about common stock is correct?medium
An investor holds 100 shares of $100 par, 6% convertible preferred stock, convertible at $20. If the market price of common stock rises to…hard
A company has $5 million in assets, $1 million in liabilities, and $500,000 in preferred stock. With 100,000 common shares outstanding,…hard
ABC Corp. has 250,000 common shares at $80/share and 50,000 preferred shares at $100/share. What is ABC’s total market capitalization?hard
A company has not paid dividends on its 10,000 shares of $50 par, 5% cumulative preferred for three years. How much must it pay in…hard
A warrant is most likely to be exercised when the:hard
Which tax issue is unique to holding ADRs?hard
If a shareholder does NOT exercise or sell their subscription rights during a rights offering, what will happen?hard
A 10-for-1 stock split is announced. If a shareholder owns 75 shares at $900 each before the split, what will they own after the split?hard
A company reports 2 million issued shares and 1.6 million outstanding shares. How many shares are held as treasury stock?hard
A company with net income of $2 million and 500,000 shares trades at $80 per share. What is the P/E ratio?hard
Which benefit may participating preferred shareholders receive not provided by most other preferred stockholders?hard
A corporation issues both preferred and common stock. Which class of stock is most likely to have voting rights?hard
Convertible preferred stock is most attractive to investors when:hard
Which of the following best describes a characteristic of common stockholders?easy
A cumulative preferred stockholder is entitled to:easy
Participating preferred stockholders may receive:easy
What effect does a 2-for-1 stock split have on an investor’s position?easy
How do common stockholders typically vote in corporate elections?easy
Which right allows existing common stockholders to purchase new shares before the general public?medium
Convertible preferred stock allows the holder to:medium
A warrant issued with a new stock offering:medium
Book value per share is best described as:medium
A company's price-to-earnings (P/E) ratio provides investors with an indication of:medium
Which statement about common stock dividends is correct?medium
Callable preferred stock gives the issuing company the right to:medium
Which of the following occurs on the ex-dividend date for a common stock?hard
Which is true about stock rights issued to existing shareholders?hard
In a corporate liquidation, which security has the lowest claim on assets?hard
What is the primary risk for U.S. investors who own ADRs?hard
A bond backed by a pool of mortgage loans most likely is a:easy
Prepayment risk is most closely associated with which type of debt security?medium
An investor concerned about prepayment risk should be cautious when investing in which securities?medium
Which risk is a primary concern for investors in a GNMA (Ginnie Mae) pass-through security?easy
What is a unique risk of mortgage-backed securities (MBS) compared with traditional corporate bonds?medium
Which statement about GNMA securities is TRUE?medium
When mortgage rates fall, holders of GNMA securities are subject to which risk?hard
GNMA securities pay interest and principal to investors:easy
All of the following are risks associated with mortgage-backed securities EXCEPT:medium
An investor purchases Class A shares of a mutual fund. Which of the following costs will most likely apply at the time of purchase?easy
If a mutual fund charges a 12b-1 fee as part of its expense ratio, the fee is used for which expense?medium
A 40 strike call option on stock trading at $38 is considered:easy
A customer who sells (writes) a call option is said to have a:easy
A 75 strike put with the stock at $80 is:medium
A customer who sells a put option is exposed to which primary risk?medium
Which of the following is true for a call option at the money?medium
A put option is described as 'in the money' when:easy
What is the maximum loss for the buyer of an option contract?easy
A call option with a $25 strike is at the money when the stock is at:medium
A customer is long 1 ABC 40 put. What does this give the customer the right to do?medium
A call with a $25 strike and the underlying stock at $22 is:hard
The writer of a naked call faces which risk profile?hard
An investor who writes a call option is said to be:easy
Which of the following statements is TRUE regarding a put option that is at-the-money?hard
To receive a declared stock dividend, an investor must purchase the stock before which date?medium
ABC Corporation declares a $1.00 per share dividend. The stock closes at $50 the day before the ex-dividend date. On the ex-date, the…medium
The record date for a dividend is the date on which:easy
An investor owns 200 shares of a stock at $80 per share. After a 2-for-1 stock split, the investor will have:easy
A company executes a 1-for-5 reverse stock split. An investor who owned 500 shares at $2 per share will now own:medium