Exam (elaborations)
FINRA SIE Exam Practice Questions and Answers (100% Pass)
- Course
- Institution
FINRA SIE Exam Practice Questions and Answers (100% Pass)
[Show more]
Content preview
©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Wednesday, July 31, 2024 9:10 AMFINRA SIE Exam Practice Questions and
Answers (100% Pass)
If interest Rates fall the issuer will most likely call which bonds first? - ✔️✔️High Dividend
Rate preferred issues trading at a premium
What are some actions by a corporation will affect an individuals common shareholder's
equity - ✔️✔️Conversion of convertible preferred stocks or bond
Repurchase of common shares
Issuance of additional common shares
(Stock splits do not effect shareholders equity but it must be voted on because it effects
Par Value)
Benefits to a Convertible stock compared to a regular debenture - ✔️✔️Convertible stock
will have a slightly lower yield than non-convertible however it will raise in value as the
market price of common stock rises
What traits do preferred stock and bonds have in common? How are they different? -
✔️✔️Can be callable by issuer, both have periodic payments. Both are senior securities
to common stock.
1
,©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Wednesday, July 31, 2024 9:10 AM
Neither have voting rights
Preferred is paid dividends on a percentage of face value much like the yield of a bond.
Preferred stock has no maturity date and can be held perpetually while bonds have a
set maturity date.
Payments to preferred stock are not mandatory unless a declared dividend has been
issued to common stock
Payments to bond holders are mandatory
When are common dividends declared and paid? - ✔️✔️Quarterly for both
A customer owns 256 shares of ABC common stock. ABC declares a rights offering,
with the terms being that for every 15 rights a shareholder may purchase one additional
share.at $24 a share. Any fractional rights may be rounded up to buy an additional
share.
How many shares may the customer buy with these right? - ✔️✔️A share holder can buy
a maximum of 18 shares with these rights paying $432 for them.
The 17.06 shares may be rounded up to 18.
XXYZ ADR (American Depository Receipt) represents 10% of the value of an XXYZ
ordinary share. The ordinary shares trade on the London Stock Exchange, where the
current price is 400 British Pounds (BP). The current exchange rate for the British
Pound against the US Dollar is $1.40. The ordinary share pays an annualized dividend
2
,©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Wednesday, July 31, 2024 9:10 AM
of 12 BP. The XXYZ ADR is listed on the NYSE. If a customer places an order to buy
$560,000 of the ADR on the customer will buy how many shares of the ADR? -
✔️✔️10,000 Shares with $560.,000
Explanation
400 BP x $1.4 = 560
$560, BP/share = 10,000 Shares of XXYZ
Preferred Stock market valuation is based primarily on what?
Performance of stock?
Inflation?
Interest rates? - ✔️✔️Interest Rates is the correct answer, remember that preferred stock
is much like a bond in that it has fixed payments and is considered fixed income.
Long term market interest rate levels determine the valuation.
Rights are? - ✔️✔️Exerciserable, Negotiable (can be traded), Giftable
Dividends can be paid in the form of? - ✔️✔️Cash or products
3
, ©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Wednesday, July 31, 2024 9:10 AM
Additional shares of ANOTHER company (yes another company)
Additional shares of that company
NOT Options and Not Tax deferments
Preferred Stock is? - ✔️✔️Performance based, participating, cumulative (dividends)
It is not refundable or redeemable
A corporate bond which is backed solely by full faith and credit of the issuer.. -
✔️✔️Debenture
Trades of all of the following will settle in Fed Funds Except?
1) US Treasury Bonds
2) Treasury Bills
3) Prime Commercial Paper
4) Prime Banker's Acceptances - ✔️✔️3) Prime commercial paper is not traded by the
Federal Reserve therefore does not settle in Fed Funds
Prime Banker's Acceptances, T Bills, T Bonds, are all settled in Fed Funds
4
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller OliviaWest. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $13.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
76658 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now