SIE Equity Securities 3

Question 1

What is the primary market?

Accepted Answer

Where newly issued securities are sold for the first time

Answer

The primary market is where new securities are first issued and sold, with proceeds going to the issuing company.

Question 2

An Initial Public Offering (IPO) occurs when a company:

Accepted Answer

Lists its shares on a stock exchange for the first time

Answer

An IPO is when a private company first offers its shares to the public on a stock exchange.

Question 3

What does EPS (Earnings Per Share) measure?

Accepted Answer

Net income divided by total outstanding shares

Answer

EPS is calculated by dividing a company's net income by the number of outstanding shares.

Question 4

Blue chip stocks are generally characterized by:

Accepted Answer

Large, well-established companies with stable earnings

Answer

Blue chip stocks represent financially stable, large-cap companies with long track records of reliable performance.

Question 5

A stock trading 'ex-rights' means the shares are trading:

Accepted Answer

Without the right to receive the upcoming rights offering

Answer

When stock trades ex-rights, buyers do not receive the subscription rights associated with the upcoming rights offering.

SIE - Securities Industry Essentials Practice Test