FINRA Security Industry Essentials Practice Test 31

1. It may be necessary for a company to repurchase some of its stock, to increase its treasury stock, for which one of the following reasons:

2. An investor owns 100 shares of XYZ 8% participating preferred stock. XYZ's common stock pays a quarterly dividend of $.25. How much will the investor earn each year in dividends?

3. An investor has purchased shares of a foreign company through an ADR. Which of the following is not true?

4. An investor would expect to realize the largest capital gain by buying bonds that are:

5. The type of bond that is secured by real estate is called a:

6. XYZ has 8% subordinated debentures trading in the market place at $120. They are convertible into XYZ common stock at $25 per share. What is the parity price of the common stock?

7. When contrasting a corporate bond to a municipal bond of the same quality and maturity, you would observe which of the following?

8. An investor purchased a Treasury bond at 95.03. How much did he pay for the bond?

9. Which of the following could trade in the money market?

10. Which of the following is NOT true of money market instruments?

11. Which one of the following interest rates is controlled by the Federal Reserve Board?

12. The Federal Reserve Board sets all of the following except:

13. 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. People who signed the registration statement.

II. Officers of the issuer.

III. Syndicate members.

IV. Accountants.

14. A company doing a preemptive rights offering would most likely use what type of underwriting agreement?

15. A corporation in your state wants to sell 1,000,000 shares of stock at $5 per share to investors. Which of the following is NOT true under Rule 147?

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