Test Questions Flashcards
Which of the following is NOT a right of common stockholders?
Right to elect the board of directors
Right to vote for executive compensation
Right to vote for a stock split
Right to maintain their percentage of ownership in the company
Which of the following is NOT true regarding ADRs?
They are receipts of ownership of foreign shares being held abroad in a U.S. bank. Each ADR represents 100 shares of foreign stock, and the ADR holder may request delivery of the foreign shares. ADR holders have the right to vote and receive dividends that the foreign corporation declares for shareholders. The foreign country may issue restrictions on the foreign ownership of stock.
Which of the following is NOT true of authorized stock?
It is the maximum number of shares a company may sell.
It is arbitrarily determined at the time of incorporation and may not be changed.
It may be sold in total or in part when the company goes public.
It may be sold to investors to raise operating capital for the company.
Which of the following issues standardized options?
The exchanges
The OCC
The company
Nasdaq
Common stockholders do not have the right to vote on which of the following issues?
Election of the board of directors
Stock splits
Issuance of additional common shares
Bankruptcy
Which type of bond requires the investor to deposit coupons to receive interest payments but have the owner’s name recorded on the books of the issuer?
Registered bonds
Bearer bonds
Book entry/ journal entry bonds
Principal-only bonds
Which bonds are issued as a physical certificate without the owner’s name on them and require whoever possesses these bonds to clip the coupons to receive their interest payments and to surrender the bond at maturity in order to receive the principal payment?
Registered bonds
Book entry/ journal entry bonds
Principal-only registered bonds
Bearer bonds
In a DPP all of the following may be depreciated, EXCEPT:
buildings.
machinery.
equipment.
raw land.
Which of the following are true about an option?
I. It is a contract between two parties that determines the time and place at which a security may be bought or sold.
II. The two parties are known as the buyer and the seller. The money paid by the buyer of the option is known as the option’s premium.
III. The buyer has bought the right to buy or sell the security depending on the type of option.
IV. The seller has an obligation to perform under the contract, possibly to buy or sell the stock depending on the option involved.
II, III, and IV
I, II, III, and IV
I, II, and III
III and IV
Which of the following are bearish? I. Call seller II. Put seller III. Call buyer IV. Put buyer
II and III
II and IV
I and IV
I and II
Which of the following are bearish? I. Call seller II. Put seller III. Call buyer IV. Put buyer
II and III
II and IV
I and IV
I and II
A syndicate has published a tombstone ad prior to the issue becoming effective. Which of the following must appear in the tombstone?
I. A statement that the registration has not yet become effective.
II. A statement that the ad is not an offer to sell the securities.
III. Contact information.
IV. A no commitment statement.
III and IV
II and III
I and II
I, II, III, and IV
During a new issue registration, false information is included in the prospectus to buyers. Which of the following may be held liable to investors?
I. Officers of the issuer
II. Accountants
III. Syndicate members
IV. People who signed the registration statement
I and III I, III, and IV
I, II, and III
I, II, III, and IV
Corporations may do all of the following, EXCEPT: Issue preferred stock only. Issue nonvoting common stock. Sell stock out of the treasury. Repurchase its own shares.
A
A corporation in your state wants to sell 1,000,000 shares of stock at $ 5 per share to investors under Rule 147. Eighty percent of all of the following have to be located in the state, EXCEPT:
Corporate assets.
Proceeds used in the state.
Income derived from activity within the state.
The purchasers.
B
