SIE practice questioneasyStock Splits
What effect does a 2-for-1 stock split have on an investor’s position?
- ADoubles both the number of shares and the price per share
- BDoubles the number of shares and halves the price per share✓ Correct answer
- CHalves both the number of shares and the price per share
- DDoubles the price per share only
Explanation
Why B — Doubles the number of shares and halves the price per share
A 2-for-1 split means shareholders have twice as many shares at half the price; the total value is unchanged. The other choices incorrectly describe the split’s impact.
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