STC Series 7 - Chapters 1-4 Review
Exam With 100% Correct Answers
The separation of a division or subsidiary from its parent to create a new corporate entity is
considered a ______. On the other hand, a _____ or acquisition is the combination of two
entities. - CORRECT ANSWER✔✔A spinoff; merger
When securities are inherited, the cost basis is stepped up to the current market value at the
____ __ _____. In this case, it is $46. In addition, the inherited security will be considered to be
held long term regardless of the holding period of the recipient. - CORRECT ANSWER✔✔time of
death
In a JTWROS account, each holder's interest is ____ and _____. Each position in the account is
owned by both persons. - CORRECT ANSWER✔✔equal and undivided
______ preferred stock will add all unpaid dividends to a future payment if a cash dividend is to
be paid to common shareholders. . - CORRECT ANSWER✔✔cumulative
______ preferred stock allows the owners to share in the extraordinary earnings of a company.
Essentially, participating preferred has a stated dividend, but these shareholders may receive
more than that amount based on the profits of the issuing company. - CORRECT
ANSWER✔✔participating
_____ preferred stock allows the owner to convert the stock into a fixed number of common
shares. - CORRECT ANSWER✔✔convertible
____ preferred stock allows the issuer to retire (call) the stock in at a predetermined price -
CORRECT ANSWER✔✔callable
Exam With 100% Correct Answers
The separation of a division or subsidiary from its parent to create a new corporate entity is
considered a ______. On the other hand, a _____ or acquisition is the combination of two
entities. - CORRECT ANSWER✔✔A spinoff; merger
When securities are inherited, the cost basis is stepped up to the current market value at the
____ __ _____. In this case, it is $46. In addition, the inherited security will be considered to be
held long term regardless of the holding period of the recipient. - CORRECT ANSWER✔✔time of
death
In a JTWROS account, each holder's interest is ____ and _____. Each position in the account is
owned by both persons. - CORRECT ANSWER✔✔equal and undivided
______ preferred stock will add all unpaid dividends to a future payment if a cash dividend is to
be paid to common shareholders. . - CORRECT ANSWER✔✔cumulative
______ preferred stock allows the owners to share in the extraordinary earnings of a company.
Essentially, participating preferred has a stated dividend, but these shareholders may receive
more than that amount based on the profits of the issuing company. - CORRECT
ANSWER✔✔participating
_____ preferred stock allows the owner to convert the stock into a fixed number of common
shares. - CORRECT ANSWER✔✔convertible
____ preferred stock allows the issuer to retire (call) the stock in at a predetermined price -
CORRECT ANSWER✔✔callable
