Achievable SIE Exam Questions and Answers 100% Pass
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Achievable SIE
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Achievable SIE
Achievable SIE Exam Questions and
Answers 100% Pass
What is an issuer in the financial context?
An issuer is an organization that raises funds by offering and selling securities to investors.
What does the term security mean in finance?
A security is an investment instrument, includi...
1 Achievable SIE Exam Questions and Answe rs 100 % Pass What is an issuer in the financial context? ✔✔ An issuer is an organization that raises funds by offerin g and selling securities to investors. What does the term security mean in finance? ✔✔ A security is an investment instrument, including equities, debt instruments, mutual funds, options, and exchange -traded funds (ETFs). How is equity defined in busines s? ✔✔ Equity represents ownership interest in a company. What are two ways to earn from common stock? ✔✔ 1. Capital gains from price appreciation ✔✔ 2. Receiving cash dividends What are retained earnings? 2 ✔✔ Retained earnings are the portion of a company’s profits that are reinvested into the business rather than being distributed as dividends. What are growth companies? ✔✔ Growth companies reinvest their profits back into the business, do not pay dividend s, and typically expand at a faster rate than the overall market. What rights do common stockholders have? ✔✔ - The right to a share of dividends ✔✔ - The right to vote on corporate matters ✔✔ - The right to access the company’s financial records ✔✔ - The right to maintain their ownership percentage ✔✔ - The right to vote on stock splits ✔✔ - The right to claim assets during liquidation ✔✔ - The right to transfer their shares What types of dividends can a company issue? ✔✔ - Cash dividends: Payments made per share to stockholders 3 ✔✔ - Stock dividends: Additional shares given to stockholders, maintaining the overall value ✔✔ - Product dividends: Dividends paid in the form of products or other companies' stocks, which are less common and taxable Who constit utes the Board of Directors (BOD)? ✔✔ The BOD is a group of individuals elected by stockholders (one vote per share) who guide the company’s strategic direction. What is statutory voting? ✔✔ Statutory voting allows stockholders to cast all their votes for each director position separately, favoring larger shareholders. What is cumulative voting, and how is it beneficial? ✔✔ Cumulative voting lets stockholders allocate all their votes to on e or more director positions, benefiting smaller shareholders. What are proxies in corporate governance? ✔✔ Proxies are voting tools that enable investors to vote without attending the annual meeting. 4 What actions can dilute a shareholder’s ownership? ✔✔ 1. Issuing additional shares ✔✔ 2. Issuing convertible securities What is a forward stock split? ✔✔ A forward stock split increases the number of shares and reduces the share price, keeping the total value the same, and requires shareholder approval. What is the effect of a reverse stock split? ✔✔ A reverse stock split decreases the number of shares and increases the share price, maintaining the same overall value, and requires shareholder approval. What is the order of priority for asset claims during liquidation? ✔✔ 1. Unpaid wages ✔✔ 2. Unpaid taxes ✔✔ 3. Secured creditors (those with a lien) ✔✔ 4. Unsecured creditors (those without a lien)
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