Equity Securities & Stock Markets Flashcards
6 cards from real Series 7 – General Securities Representative Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Equity Securities & Stock Markets flashcards as text
A company declares a 2-for-1 stock split. If a shareholder owns 100 shares at $80 each, what will they hold after the split?
Answer: 200 shares at $40 each
In a 2-for-1 split, share count doubles and price halves, so 100 shares at $80 becomes 200 shares at $40.
Which type of order instructs a broker to buy or sell a stock immediately at the best available current price?
Answer: Market order
A market order executes immediately at the best available price without a specified price constraint.
What is the primary difference between common stock and preferred stock?
Answer: Preferred stockholders have priority over dividends and assets in liquidation
Preferred stockholders receive dividends before common stockholders and have priority claims on assets in liquidation.
An investor sells short 200 shares of XYZ at $50. If the price rises to $65, what is the investor's loss?
Answer: $3,000
The loss is ($65 - $50) × 200 = $15 × 200 = $3,000.
Which market is known as the secondary market for over-the-counter (OTC) equity securities in the U.S.?
Answer: NASDAQ
NASDAQ is the primary electronic OTC marketplace for U.S. equities, operating as a dealer-based market.
What does the ex-dividend date determine?
Answer: The first day a buyer of shares will NOT receive the upcoming dividend
The ex-dividend date is the first day a buyer does not qualify for the upcoming dividend; buyers must own shares before this date.
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Sources & references
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- finra.org — Eligibility, fees, passing score, score validity, test dates, retake policy, score release, exam format, exam information · verified Oct 2026
- prometric.com — Test delivery · verified Oct 2026