FINRA SIE
FINRA SIE EXAM – 2025/2026 EDITION –
100%
CORRECT ANSWERS FOR FULL EXAM
PREPARATION
If interest Rates fall the issuer will most likely call which
bonds first? ANSWER-High Dividend Rate preferred issues
trading at a premium
What are some actions by a corporation will affect an
individuals common shareholder's equity -ANSWER-
Conversion of convertible preferred stocks or bond
Repurchase of common shares
Issuance of additional common shares
(Stock splits do not effect shareholders equity but it must
be voted on because it effects Par Value)
Benefits to a Convertible stock compared to a regular
debenture ANSWER-Convertible stock will have a slightly
lower yield than nonconvertible however it will raise in
value as the market price of common stock rises
What traits do preferred stock and bonds have in common?
How are they different? ANSWER-Can be callable by issuer,
both have periodic payments. Both are senior securities to
common stock.
Neither have voting rights
Preferred is paid dividends on a percentage of face value
much like the yield of a bond.
Preferred stock has no maturity date and can be held
perpetually while bonds have a set maturity date.
Payments to preferred stock are not mandatory unless a
declared dividend has been issued to common stock
FINRA SIE EXAM 2025-2026 EDITION 100% CORRECT ANSWERS FOR FULL EXAM PREPARATION
,FINRA SIE
Payments to bond holders are mandatory
When are common dividends declared and paid? -ANSWER-
Quarterly for both
A customer owns 256 shares of ABC common stock. ABC
declares a rights offering, with the terms being that for
every 15 rights a shareholder may purchase one additional
share.at $24 a share. Any fractional rights may be rounded
up to buy an additional share.
How many shares may the customer buy with these right? -
ANSWER-A share holder can buy a maximum of 18 shares
with these rights paying $432 for them.
The 17.06 shares may be rounded up to 18.
XXYZ ADR (American Depository Receipt) represents 10%
of the value of an XXYZ ordinary share. The ordinary shares
trade on the London Stock Exchange, where the current
price is 400 British Pounds (BP). The current exchange rate
for the British Pound against the US Dollar is $1.40. The
ordinary share pays an annualized dividend of 12 BP. The
XXYZ ADR is listed on the NYSE. If a customer places an
order to buy $560,000 of the
ADR on the customer will buy how many shares of the
ADR? -ANSWER10,000 Shares with $560.,000 Explanation
400 BP x $1.4 = 560
$560, BP/share = 10,000 Shares of XXYZ
Preferred Stock market valuation is based primarily on
what?
Performance of stock?
FINRA SIE EXAM 2025-2026 EDITION 100% CORRECT ANSWERS FOR FULL EXAM PREPARATION
, FINRA SIE
Inflation?
Interest rates? -ANSWER-Interest Rates is the correct
answer, remember that preferred stock is much like a bond
in that it has fixed payments and is considered fixed
income.
Long term market interest rate levels determine the
valuation.
Rights are? -ANSWER-Exerciserable, Negotiable (can be
traded), Giftable
Dividends can be paid in the form of? -ANSWER-Cash or
products
Additional shares of ANOTHER company (yes another
company)
Additional shares of that company
NOT Options and Not Tax deferments
Preferred Stock is? -ANSWER-Performance based,
participating, cumulative (dividends)
It is not refundable or redeemable
A corporate bond which is backed solely by full faith and
credit of the issuer.. -ANSWERDebenture
Trades of all of the following will settle in Fed Funds Except?
1)US Treasury Bonds
2)Treasury Bills
3)Prime Commercial Paper
FINRA SIE EXAM 2025-2026 EDITION 100% CORRECT ANSWERS FOR FULL EXAM PREPARATION
FINRA SIE EXAM – 2025/2026 EDITION –
100%
CORRECT ANSWERS FOR FULL EXAM
PREPARATION
If interest Rates fall the issuer will most likely call which
bonds first? ANSWER-High Dividend Rate preferred issues
trading at a premium
What are some actions by a corporation will affect an
individuals common shareholder's equity -ANSWER-
Conversion of convertible preferred stocks or bond
Repurchase of common shares
Issuance of additional common shares
(Stock splits do not effect shareholders equity but it must
be voted on because it effects Par Value)
Benefits to a Convertible stock compared to a regular
debenture ANSWER-Convertible stock will have a slightly
lower yield than nonconvertible however it will raise in
value as the market price of common stock rises
What traits do preferred stock and bonds have in common?
How are they different? ANSWER-Can be callable by issuer,
both have periodic payments. Both are senior securities to
common stock.
Neither have voting rights
Preferred is paid dividends on a percentage of face value
much like the yield of a bond.
Preferred stock has no maturity date and can be held
perpetually while bonds have a set maturity date.
Payments to preferred stock are not mandatory unless a
declared dividend has been issued to common stock
FINRA SIE EXAM 2025-2026 EDITION 100% CORRECT ANSWERS FOR FULL EXAM PREPARATION
,FINRA SIE
Payments to bond holders are mandatory
When are common dividends declared and paid? -ANSWER-
Quarterly for both
A customer owns 256 shares of ABC common stock. ABC
declares a rights offering, with the terms being that for
every 15 rights a shareholder may purchase one additional
share.at $24 a share. Any fractional rights may be rounded
up to buy an additional share.
How many shares may the customer buy with these right? -
ANSWER-A share holder can buy a maximum of 18 shares
with these rights paying $432 for them.
The 17.06 shares may be rounded up to 18.
XXYZ ADR (American Depository Receipt) represents 10%
of the value of an XXYZ ordinary share. The ordinary shares
trade on the London Stock Exchange, where the current
price is 400 British Pounds (BP). The current exchange rate
for the British Pound against the US Dollar is $1.40. The
ordinary share pays an annualized dividend of 12 BP. The
XXYZ ADR is listed on the NYSE. If a customer places an
order to buy $560,000 of the
ADR on the customer will buy how many shares of the
ADR? -ANSWER10,000 Shares with $560.,000 Explanation
400 BP x $1.4 = 560
$560, BP/share = 10,000 Shares of XXYZ
Preferred Stock market valuation is based primarily on
what?
Performance of stock?
FINRA SIE EXAM 2025-2026 EDITION 100% CORRECT ANSWERS FOR FULL EXAM PREPARATION
, FINRA SIE
Inflation?
Interest rates? -ANSWER-Interest Rates is the correct
answer, remember that preferred stock is much like a bond
in that it has fixed payments and is considered fixed
income.
Long term market interest rate levels determine the
valuation.
Rights are? -ANSWER-Exerciserable, Negotiable (can be
traded), Giftable
Dividends can be paid in the form of? -ANSWER-Cash or
products
Additional shares of ANOTHER company (yes another
company)
Additional shares of that company
NOT Options and Not Tax deferments
Preferred Stock is? -ANSWER-Performance based,
participating, cumulative (dividends)
It is not refundable or redeemable
A corporate bond which is backed solely by full faith and
credit of the issuer.. -ANSWERDebenture
Trades of all of the following will settle in Fed Funds Except?
1)US Treasury Bonds
2)Treasury Bills
3)Prime Commercial Paper
FINRA SIE EXAM 2025-2026 EDITION 100% CORRECT ANSWERS FOR FULL EXAM PREPARATION
