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Series 7 Chapter 1 questions with verified solutions graded A+
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Series 7 Chapter 1 questions with verified solutions graded A+
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Series 7 Chapter 1Security - correct answer ✔✔an investment that represents either an ownership or a debt stake in a
company
Debt Security - correct answer ✔✔usually acquired by buying a company's bonds
Debt Investment - correct answer ✔✔a loan to a company in exchange for interest income and the
promise to repay the loan at a future maturity date. Does not confer ownership
Stock - correct answer ✔✔represents equity or ownership in a company
Bond - correct answer ✔✔a loan to a company
Balance Sheet - correct answer ✔✔summarizes the company's assets, liabilities, and equity
Net Worth - correct answer ✔✔Assets-Liabilities=Equity
Preferred Stock - correct answer ✔✔Represents ownership in a corporation, but usually does not have
the same voting rights or appreciation potential as common stock
Common Stock - correct answer ✔✔can be classified as authorized, issued outstanding, and treasury
Authorized Stock - correct answer ✔✔a specific number of shares the company has authorization to
issue or sell.
Issued Stock - correct answer ✔✔stock that has been authorized and distributed to investors.
, Outstanding Stock - correct answer ✔✔includes any shares that a company has issued but has not
repurchased (Stock that is investor owned)
Treasury Stock - correct answer ✔✔stock a corporation has issued and subsequently repurchased from
the public.
Par Value (stock) - correct answer ✔✔an arbitrary value the company gives the stock, has no effect on
the stock's market price.
Book value - correct answer ✔✔how much a common stockholder could expect to receive for each share
if the corporation were liquidated.
Market Price - correct answer ✔✔the price investors must pay to buy the stock
Voting Rights - correct answer ✔✔Rights of common stockholders. Vote on: issuance of convertible
securities or additional common stock, substantial changes in the corporation's business such as mergers
or acquisitions, and declarations of stock splits
Statutory Voting - correct answer ✔✔Allows a stockholder to cast one vote per share owned for each
item on a ballot
Cumulative Voting - correct answer ✔✔allows stockholders to allocate their total votes in any manner
they choose.
Proxy - correct answer ✔✔a form of absentee ballot
Proxy Solicitation - correct answer ✔✔When a company sends proxies to shareholders.
Preemptive Rights - correct answer ✔✔right of common stockholder to purchase enough newly issued
shares to maintain their proportionate ownership in the corporation.
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