SIE Equity Securities 1

Question 1

Which type of stock gives shareholders priority over common stockholders when dividends are distributed?

Accepted Answer

Preferred stock

Answer

Common stock

Answer

Convertible bonds

Answer

Warrants

Question 2

What is the term for a corporate action that increases the number of outstanding shares while reducing the price per share proportionally?

Accepted Answer

Forward stock split

Answer

Reverse stock split

Answer

Stock dividend

Answer

Rights offering

Question 3

An investor who believes a stock's price will decline would most likely take which position?

Accepted Answer

Short position

Answer

Long position

Answer

Covered call

Answer

Long put

Question 4

What are American Depositary Receipts (ADRs)?

Accepted Answer

Foreign company shares traded on US exchanges in US dollars

Answer

US government bonds traded abroad

Answer

Receipts for domestic warehouse inventory

Answer

Municipal bond certificates

Question 5

Which of the following best describes the ex-dividend date?

Accepted Answer

The first date a buyer of stock is NOT entitled to the declared dividend

Answer

The date the dividend is paid to shareholders

Answer

The date the board declares the dividend

Answer

The date the shareholder record list is finalized

Question 6

What does the term 'market capitalization' refer to?

Accepted Answer

The total value of a company's outstanding shares

Answer

The total value of a company's debt

Answer

The company's annual revenue

Answer

The book value of a company's assets