SIE Module 3 Test Bank

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1. All of the following statements are correct regarding preferred stock EXCEPT:

2. Which of the following statements is correct regarding stock rights?

3. All of the following statements are correct regarding warrants EXCEPT:

4. Which of the following statements is correct regarding the characteristics of American Depository Receipts (ADRs)?

5. An investor recently purchased nonconvertible, noncumulative preferred stock of a company listed on the NYSE. Which one of the following statements is correct regarding the stock?

6. All of the following are correct regarding equity-related instruments EXCEPT:

7. A penny stock typically refers to the stock of a small company that trades for less than:

8. Several years ago, Ronnie purchased 100 shares of convertible preferred stock in ABC Company for $500 per share. The conversion privilege indicated that Ronnie could convert each share of preferred stock into 50 shares of common stock. When the price of the ABC Company common stock reached $20 per share, Ronnie decided to convert all his preferred shares into common shares. He later sold the common shares for $15 per share. What was the amount of Ronnie’s gain or loss upon the sale?

9. Which one of the following statements is correct regarding preferred stock?

10. ABC Company has issued several types of debt and equity securities. Which one of the following ABC Company securities would be most influenced by the price of ABC Company’s common stock?